Post on 02-Feb-2023
BEFORE THEPUBLIC SERVICE COMMISSION
OF SOUTH CAROLINA
In Re: Complaint and Petition for Relief of BellSouthTelecommunications, LLC d/b/a ATILT Southeast d/b/aATILT South Carolina v. Halo Wireless, Inc. for Breachof the Parties' Interconnection Agreement
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Docket No. 2011-304-C
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DIRECT TESTIMONY OF J.SCOTT McPHEE
ON BEHALF OF ATILT SOUTH CAROLINA
FEBRUARY 24, 2012
PSC Docket No. 2011-304-C
DIRECT TESTIMONY OF J.SCOTT McPHEE
ON BEHALF OF ATILT SOUTH CAROLINA
3 I. INTRODUCTION
4 Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
5 A. My name is J. Scott McPhee. My business address is 2600 Camino Ramon, San Ramon,
California.
8 Q. ON WHOSE BEHALF ARE YOU PROVIDING YOUR TESTIMONY TODAY?
9 A. BellSouthTelecommunications, LLC d/b/aAT&T South Carolina("AT&T South
10 Carolina" or "AT&T").
12 Q. BYWHOM ARE YOU EMPLOYED AND WHAT IS YOUR POSITION?
13 A. I am an Associate Director —Wholesale Regulatory Policy & Support for Pacific Bell
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Telephone Company d/b/a AT&T California. I work on behalf of the AT&T incumbent
local exchange carriers ("ILECs")throughout AT& T's 22-state ILEC territory. I am
responsible for providing regulatory and witness support relative to various wholesale
products and pricing, supporting negotiations of local interconnection agreements
("ICAs") with competitive local exchange carriers ("CLECs")and Commercial Mobile
Radio Service ("CMRS")providers, participating in state commission and judicial
proceedings, and guiding compliance with the Federal Telecommunications Act of 1996
("Act") and its implementing rules.
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PSC Docket No. 2011-304-C
1 Q. WHATISYOUREDUCATIONALBACKGROUND?
2 A. I received my Bachelor ofArts degree with a double major in Economics and Political
Science &om the University of California at Davis.
5 Q. PLEASE OUTLINE YOUR WORK EXPERIENCE AT ATILT.
6 A. I began employment with AT&T's predecessor, SBC, in 2000 in the Wholesale
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Marketing —Industry Markets organization as Product Manager for Reciprocal
Compensation throughout SBC's 13-state region. My responsibilities included
identifying policy and product issues to assist negotiations and witnesses addressing
SBC's reciprocal compensation and interconnection arrangements, as well as SBC's
transit traffic offering. In June of 2003, I moved into my current role as an Associate
Director in the Wholesale Marketing Product Regulatory organization. In this position,
my responsibilities include helping define AT&T's positions on certain issues for
Wholesale Marketing, and ensuring that those positions are consistently articulated in
proceedings before state commissions.
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17 Q. HAVE YOU PREVIOUSLY TESTIFIED BEFORE STATE PUBLIC UTILITY
18 COMMISSIONS?
19 A. Yes, I have testified before several different state public utility commissions on
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telecommunications issues. Virtually all of those cases involved the arbitration of ICAs
or disputes regarding the interpretation or enforcement of ICAs, like the one at issue in
this proceeding. I also have submitted testimony in proceedings in Wisconsin and
PSC Docket No. 2011-304-C
Tennessee in which AT&T incumbent local exchange carriers ("ILECs")and Halo have
disputed the same issues as in this case.
4 Q. HAVE YOU PREVIOUSLY TESTIFIED BEFORE THE SOUTH CAROLINA
COMMISSION?
6 A. Yes. I testified at the evidentiary hearing in the AT&T South Carolina / Sprint
arbitration proceedings (Docket No. 2007-125-C) in April 2007.
9 Q. WHAT IS THE PURPOSE OF YOUR DIRECT TESTIMONY?
10 A. I will discuss AT&T South Carolina's ICA with Halo and the claims AT&T South
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Carolina has made for breach of the ICA. More specifically, I will provide background
on the disputes and why they are important.
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14 Q. WHAT IS THE PARTIES' MAIN DISAGREEMENT?
15 A. Halo is sending landline-originated traffic to AT&T South Carolina in violation of the
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parties' ICA. In addition, Halo has disguised traffic (by modifying the call records) so
that toll traffic appears to our billing systems to be local traffic. The effect has been to
enable Halo to avoid paying the AT&T ILECs literally millions ofdollars in applicable
access charges. This case is necessary to put an end to Halo's continuing breach of its
ICA with AT&T South Carolina.
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PSC Docket No. 2011-304-C
1 Q. WHY IS IT IMPORTANT FOR THE COMMISSION TO DECIDE THIS
CASE PROMPTLY?
3 A. The unlawful avoidance of access charges, also known as access arbitrage, is an ongoing
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and significant problem for the industry as a whole. Halo's is just the latest in a long line
of access-avoidance schemes. The longer Halo can keep the scheme going, the more it
improperly gains and the more AT&T South Carolina and other carriers unjustly lose.
This is especially so now that Halo has filed for bankruptcy, which makes it even less
likely that AT&T South Carolina will ever receive the access charges it is owed. Halo
should not be permitted to continue to "run a tab" on AT&T's network by sending traffic
that is not authorized by the ICA and not paying the applicable price for its traffic.
Because Halo has breached its ICA with AT&T South Carolina, AT&T should be
allowed to stop accepting traffic &om Halo (as it recently was allowed to do in
Tennessee) in order to avoid future financial harm &om Halo not paying the applicable
charges for its traffic and facilities. '
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In light ofHalo's pending bankruptcy proceeding, AT&T South Carolina does not ask the Commission toorder payment of any money as part of this case. AT&T South Carolina does, however, ask the Commission todeclare that Halo should be required to pay AT&T South Carolina the applicable access charges on the traf5c Halohas sent. Liquidation of these amounts and other payment issues presumably will be dealt with in the bankruptcycourt
PSC Docket No. 2011-304-C
1 Q. HAS THE FCC RECENTLY ADDRESSED THK EFFECTS OF ACCESS-
AVOIDANCE SCHEMES?
3 A. Yes. On November 18, 2011, the FCC issued its Connect America Order. In the words
of FCC Commissioner Michael J. Copps, that Order
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puts the brakes on the arbitrage and gamesmanship that haveplagued [intercarrier compensation] for years and that havediverted private capital away from real investment in realnetworks. By some estimates. . . phantom traffic affects nearlyone-fiAh of the traffic on the carriers' networks. Today we say "nomore. '"
WHAT IS THK FINANCIAL IMPACT OF THIS DISPUTE?
13 A. Through December 2011,Halo owed AT&T South Carolina $636,442 in unpaid access
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charges, and the debt continues to increase significantly each month. ' Indeed, Halo has
taken advantage of the delays in this case, caused by its bankruptcy filing and its
unsuccessful attempts to remove this matter to federal court, by increasing the volume of
traffic it is sending to AT&T South Carolina. Between January 2011 and January 2012
the monthly volume of traffic Halo sent to AT&T South Carolina increased 126%. Halo
is now sending AT&T South Carolina more than 14.5 million minutes a month. Across
AT&T's 22-state ILEC territory, Halo owed AT&T approximately $16,738,668 in unpaid
Report and Order and Further Notice of Proposed Rulemaking, Connect America Fund, WC Docket No.10-90 er al. , 2011 WL 5844975 (rel. Nov. 19, 2011)("Connect America Order" )(emphasis added).
Id. at p. 749 (statement of Commissioner Michael J. Copps).
This represents the difference between the reciprocal compensation charges Halo has paid and the switchedaccess charges that it should have paid on access traffic. I explain reciprocal compensation charges and accesscharges below.
PSC Docket No. 2011-304-C
access charges as of December 2011. As in South Carolina, that amount continues to
grow, to the tune of about $1.5 million per month. '
4 II. BACKGROUND
5 Q. WHAT IS HALO?
6 A. Halo Wireless, Inc. is a corporation organized and operating under the laws of the state of
Texas. The company is headquartered in Fort Worth, Texas.
9 Q. WHO ARE HALO'S OFFICERS?
10 A. Halo's officers are:
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Russell Wiseman, President
Jeff Miller, Chief Financial Officer
Carolyn J. Malone, Secretary/Treasurer'
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15 Q. DOES HALO HAVE ANY EMPLOYEES?
16 A. Halo has only two employees —Jeff Miller and Carolyn Malone, each ofwhom is paid
17 $500 per month. While Halo identifies Russell Wiseman as its President, Mr. Wiseman
is not an employee ofHalo. Mr. Wiseman is paid as an employee of an affiliate
Since each state commission has jurisdiction over the disputes that arise &om the ICA in that state, AT&Tis or will be seeking relief in each commission.
See Exhibit JSM-1 at 10 ( Investigation into Practices ofHalo 8'ireless, Inc. and Transcom EnhancedServices, Inc. , Docket No. 9594-TI-100, Halo Wireless, Inc, and Transcom Enhanced Services, Inc. 's Answers(without Exhibits) on Issues 1-8 in the Notice of Proceeding (filed with Pub. Serv. Comm'n of Wise. , Dec. 2, 2011)("Halo/Transcom Wisconsin Answers" )).
PSC Docket No. 2011-304-C
company, Source Communications of America. Halo does not pay Mr. Wiseman any
compensation. '
4 Q. WHO OWNS HALO?
5 A. Halo is owned by Scott Birdwell (50%), Gary Shapiro (10%),and Timothy Terrell
(40%).
8 Q. WHAT DOES HALO CLAIM TO BE?
9 A. Halo claims to be a commercial mobile wireless service ("CMRS")provider,
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11 Q. WHAT TYPE OF EQUIPMENT DOES HALO CLAIM TO OPERATE?
12 A. Halo claims to operate wireless "base stations" by which it connects to its "customers. "
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Halo leases the base station equipment from a company called SAT Net. ' SAT Net is
another af51iate of Halo. The officers of SAT Net include the same Jeff Miller and Carolyn
15 Malone who are the of5cers/employees of Halo. The common owners/investors between
16 SAT Net and Halo are Scott Birdwell, Gary Shapiro, and Tim Terrell. "17
See Exhibit JSM-2 at 8-9 (In re: Halo JFireless, Inc. , United States Bankruptcy Court for the EasternDistrict ofTexas, Case No. 11-42464 ("Halo Bankruptcy proceeding"), Transcript ofProceeding Conducted byUnited States Trustee, Section 341 Meeting of Creditors held Sept, 19, 2011 ("Creditors' Meeting Transcript" )).
See Exhibit JSM-1 at 10.
Exhibit JSM-2 (Excerpts &om Creditors' Meeting Transcript) at 14. The entre transcript is voluminous andwill be made available to the Commission or the parties upon request.
Exhibit JSM-2 at 15-16.
PSC Docket No. 2011-304-C
1 Q. WHERE DOES HALO GET ITS REVENUE?
2 A. Halo gets 100%of its revenue &om a closely affiliated company called Transcom. " In fact,
ifwe assume, just for the sake of discussion, that Transcom is a "customer" ofHalo, as Halo
claims it is, then Transcom is Halo's only customer in South Carolina. In a submission it
made in the parallel proceeding in Wisconsin on January 11,2012, Halo stated that it had 35
consumer customers —none of whom were in South Carolina.
8 Q. WHAT IS TRANSCOM?
9 A. Transcom is a corporation organized and operating under the laws of the state ofTexas.
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Headquartered in Fort Worth, Texas, Transcom operates switches in Dallas, New York,
Atlanta and Los Angles. Transcom accepts traditional circuit-switched protocols such as
Time Division Multiplexing ("TDM") at these switches. "
According to Transcom's website, the company's "core service offering" is
"voice termination services. ""Voice termination service is the intermediate routing of
telephone calls between carriers for termination to the carriers serving the called party.
On its website, Transcom states that it terminates "nearly one billion minutes per month, "
and provides service to the largest Cable/MSOs, CLECs, broadband service providers,
and wireless customers. 14
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Exhibit JSM-l at 4-5 ("Currently, the only [high volume] customer is Transcom, and traffic &om Transcom
provides 100 percent ofHalo's current revenues. . . .").
Exhibit JSM-3 (Transcom web pages).
Id.
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1 Q. WHO ARE TRANSCOM'S OFFICERS?
2 A. The officers ofTranscom are largely the same as Halo. The officers ofTranscom are:
Scott Birdwell, CEO and Chairman
W. Britt Birdwell, COO and President
Jeff Miller, Chief Financial Officer
Carolyn J. Malone, Secretary and Treasurer"
8 Q. WHO OWNS TRANSCOM?
9 A. There are several investors. Scott Birdwell is the largest single individual owner. "10
11 Q. IS THIS THE SAME SCOTT BIRDWELL WHO IS THE MAIN SHAREHOLDER
12 OF HALO?
13 A. Yes, this is the same Scott Birdwell who also controls Halo. Mr. Wiseman, in his current
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capacity as the President ofHalo (having replaced Mr. Birdwell in that capacity), reports
to a management committee of the investor-owners: Scott Birdwell, Jeff Miller, and
Carolyn Malone. "
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Exhibit JSM-1 at 11.
Id.
Exhibit JSM-2 at 64.
PSC Docket No. 2011-304-C
1 Q. WHAT IS YOUR UNDERSTANDING OF THE RELATIONSHIP BETWEEN
TRANSCOM AND HALO?
3 A. It appears that Transcom and Halo are operating in concert in an attempt to avoid access
charges. Transcom aggregates third-party toll traffic by selling its "voice termination
service, "then hands the traffic off to Halo, which mischaracterizes the traffic as wireless-
originated intraMTA traffic.
8 Q. HOW AND WHY WOULD HALO AND TRANSCOM BE ACTING TOGETHER?
9 A. Transcom appears to be a very high-volume "least-cost router"" operating in the middle
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of toll calls. To the best ofmy knowledge, and based on everything Halo has said in
other state proceedings, neither Transcom nor any customer of Transcom actually
initiates any telephone calls. Rather, it takes calls initiated by customers of other carriers
and then hands the calls off to someone else (here, Halo) before the calls are delivered to
the carrier that actually terminates the call to an end user. Halo and Transcom then argue
that this process somehow transforms landline-originated traffic into wireless-originated
traffic, and somehow transforms interMTA (i.e., toll) wireless traffic into intraMTA (i.e.,
local) traffic. In this way, Halo erroneously contends that none of the traffic it hands off
to ILECs is access traffic or subject to access charges.
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ATILT South Carolina witness Mark Neinast explains the term "least-cost router" at or near page 12 ofhisprefiled Direct Testimony.
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PSC Docket No. 2011-304-C
1 Q. HAS TRANSCOM PREVIOUSLY BEEN ASSOCIATED WITH OTHER
CARRIERS THAT ENGAGED IN ACCESS-AVOIDANCE PRACTICES?
3 A. Yes. Transcom previously sent traffic to carriers like CommPartners and Global NAPS,
which, like Halo, had schemes that appeared to be designed to avoid access charges.
Global NAPs previously reported that a substantial portion of its traffic was delivered to
it by Transcom. " With Global NAPs in receivership and CommPartners in bankruptcy,
Halo provides a replacement vehicle for Transcom's continuing arbitrage.
9 III. HALO'S DEALINGS WITH ATdtT
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11 Q. WHEN DID HALO BEGIN TO SEND TRAFFIC TO AT8r T?
12 A. Halo first sent traffic to AT&T in September 2010 in Texas. In South Carolina, Halo
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began to send traffic to AT&T in January 2011. Typically, when a carrier enters the
market, there is a ramp-up period where one would expect growth to be steady, but not
exponential. Halo is notable in that the rate its traffic has grown has been abnormally
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Palmerton Telephone Company v. Global NAPs South, Inc. , Global NAPs Pennsylvania, Inc., GlobalNAPs, Inc. and Other A+liates, Docket C-2009-2093336, Opinion and Order entered March 16, 2010 ("the majorityof [GNAPs'] tragic is received &om three other carriers, Transcom, CommPartners and PointOne. . . .");JointPetition OfHollis Telephone et al for Authority to Block the Termination ofTragicpom Global NAPs Inc. , NewHampshire Public Utilities Commission, Docket No. DT 08-028, Reconsideration Order, Order No. 25,088 datedNovember 9, 2009; and Matter ofthe Complaint ofATd'cT Ohio v. Global NAPs, Ohio, Inc., PUCO Case No. 08-690-TP-CSS, Opinion and Order dated June 9, 2010.
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PSC Docket No. 2011-304-C
1 Q. HAS HALO ENTERED INTO AN ICA WITH AT&T SOUTH CAROLINA
UNDER SECTIONS 251 AND 252 OF THE 1996ACT?
3 A. Yes. The ICA is attached to my testimony as Exhibit JSM-4. Halo actually opted into
the ICA of another carrier, T-Mobile, subject to one important amendment, which I will
discuss below. Pursuant to Section 252(e) of the federal Telecommunications Act of
1996 (the "Act" or the "1996Act"), this Agreement as amended has been submitted to
the Commission and is approved.
9 Q. ARE THERE DIFFERENT TYPES OF INTERCONNECTION AGRKEMKNTS
10 FOR DIFFERENT TYPES OF CARRIERS?
11 A. Yes. Landline ICAs contain different terms and conditions than wireless ICAs due to
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different treatment of the different types of traffic. A major difference between landline
and wireless ICAs concerns what constitutes a local call and the appropriate
compensation for the exchange of such calls between the carriers' respective end users, as
well as some differences in how landline and wireless carriers provision and pay for
certain network facilities.
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18 Q. WHAT TYPE OF ICA DOES HALO HAVE WITH ATILT?
19 A. Halo entered into a wireless ICA with AT&T South Carolina, by adopting the wireless
20 ICA of another carrier.
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PSC Docket No. 2011-304-C
1 Q. WHEN IT ENTERED INTO THAT ICA, DID HALO ALSO SIGN AN
AMENDMENT TO THE ICA?
3 A. Yes. At the same time it opted in to its ICA, Halo also signed an amendment that
includes the following clause:
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SVsereas, the Parties have agreed that this Agreement will applyonly to (1) traffic that originates on AT&T's network or istransited through AT&T's network and is routed to Carrier'swireless network for wireless termination by Carrier; and (2)truffic that originates through wireless transmitting undreceiving fucilities before /Haloj delivers traffic to ATcfcT fortermination by AT&T or for transit to another network. (Emphasisadded).
Exhibit JSM-5 is a copy of this amendment.
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16 IV. HALO'S BREACH OF THE ICA BY SENDING LANDLINE TRAFFIC
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18 Q. HAS HALO BEEN BREACHING THK ICA BY SENDING NON-WIRELESS-
19 ORIGINATED TRAFFIC TO AT&T SOUTH CAROLINA?
20 A. Yes. As Count 1 ofAT&T South Carolina's Complaint alleges, Halo is breaching the
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ICA by sending traffic that is originated when a retail end user places a call using a
landline telephone. This is not "traffic that originates through wireless transmitting and
receiving facilities" as required by the ICA. Relatedly, Count 2 of the Complaint alleges
that Halo has presented inaccurate call information that effectively disguised the type of
traffic it sent to AT&T. AT&T South Carolina witness Mark Neinast explains how
AT&T discovered the true nature of the calls that Halo has been sending to AT&T.
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PSC Docket No. 2011-304-C
1 Q. WHY DOES IT MATTER WHETHER HALO SENDS ATChT LANDLINE-
ORIGINATED OR WIRELESS-ORIGINATED TRAFFIC?
3 A. First and foremost, of course, it is important because the ICA requires Halo to send
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AT&T South Carolina wireless-originated traffic only. There are no provisions in the
ICA that allow Halo to send AT&T South Carolina landline traffic. Accordingly, Halo
breached the contract when it did not abide by that requirement. Second, there is a
significant difference in what Halo is required to pay AT&T South Carolina for
terminating landline traf5c (if such traffic were allowed) versus terminating wireless
traffic. This is known as "intercarrier compensation. " Different intercarrier
compensation rates apply depending on whether traffic is local or non-local, and the
definitions ofwhat qualifies as local or non-local differ depending on whether the trafIic
is wireless or landline. Halo has been breaching its ICA by sending non-local landline
traffic to AT&T South Carolina but then claiming the traffic is actually wireless and
local, in order to pay a lower intercarrier compensation rate. The ICA contains
intercarrier compensation rates for some kinds of traffic, but non-local landline traffic is
subject to different rates contained in AT&T's switched access tariffs.
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18 Q. YOU SAID THAT LOCAL AND NON-LOCAL CALLS ARK DEFINED
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DIFFERENTLY FOR WIRELESS AND LANDLINE TRAFFIC. PLEASE
ELABORATE.
21 A. Whether a call is "local" (and thus subject to reciprocal compensation rates) or "non-
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local" (and thus subject to tariffed access charges) is determined based on different
criteria for calls placed using a wireless device as opposed to calls placed using a landline
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PSC Docket No. 2011-304-C
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telephone. Consistent with the FCC's intercarrier compensation regulations, AT&T's
ICAs with wireless carriers (including Halo's ICA with AT&T) provide that calls
originated and terminated by end-users that are both physically located within the same
MTA (Major Trading Area) ("IntraMTA" calls) are "local" calls and thus subject to
reciprocal compensation rates. See ICA, Section 1.34., definition of "Local CMRS
Calls. " An MTA, therefore, is analogous to a landline local calling area, but as explained
below, it is typically much larger. Calls exchanged between end-users located in
different MTAs are "interMTA" calls and subject to tariffed interstate or intrastate
switched access charges, which are higher.
Different criteria are used to determine whether landline traffic is "local" or "non-
local" for purposes of intercarrier compensation. Landline traffic does not rely on MTA
boundaries. Rather, landline traffic uses what I will refer to generally as "local calling
areas. " Local calling area and MTA boundaries are vastly different in size (with MTAs
being geographically much larger than local calling areas). There are only two MTAs
that cover any geographic area in South Carolina (and only 51 in the nation), whereas
there are 242 local calling areas in South Carolina alone.
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18 Q. IS THERE A SIGNIFICANT DIFFERENCE BETWEEN THK AMOUNTS HALO
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HAS BEEN PAYING TO AT&T TO TERMINATE HALO-DELIVERED
TRAFFIC AND THK AMOUNT THAT HALO SHOULD BE PAYING?
21 A. Yes. Because it claims that all of the traffic it sends to AT&T South Carolina is wireless
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and local (intraMTA), Halo has only been paying AT&T the reciprocal compensation
rate on all of the Halo-delivered traffic. As demonstrated in Mr. Neinast's testimony,
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PSC Docket No. 2011-304-C
however, much of the Halo-delivered traffic is actually interexchange landline traffic and
is therefore subject to AT&T South Carolina's tariffed access charges —not reciprocal
compensation. Of course, Halo should not be sending AT&T any landline-originated
traffic at all, but when it does send such traffic it obviously should be responsible for
paying the applicable terminating access rate.
7 Q. IS AT&T SOUTH CAROLINA THE ONLY LOCAL EXCHANGE CARRIER
HAVING THESE KINDS OF DISPUTES WITH HALO REGARDING THE
TRAFFIC HALO IS SENDING TO THEM?
10 A. No. In Tennessee, for example, the Tennessee Regulatory Authority has already found in
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favor ofboth AT&T Tennessee and a group of smaller LECs that raised these same types
of issues in separate cases against Halo. And in other states, including Georgia, Texas,
and Wisconsin, LECs other than AT&T ILECs have asserted claims against Halo.
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15 Q. DOES HALO DENY THAT IT HAS BEEN SENDING ATILT TRAFFIC THAT
16 BEGINS USING A LANDLINE VOICE SERVICE?
17 A. No. Instead, Halo argues that even when calls actually begin as landline calls, they
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somehow "originate" again as wireless (and local) calls when they pass through
Transcom before reaching Halo. More specifically, Halo contends that Transcom is an
"Enhanced Service Provider, "or "ESP,"that ESPs are treated as "end users, "and that
ESPs are deemed to originate (or re-originate) calls that pass through them.
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PSC Docket No. 2011-304-C
Q. HAS THE FCC ADDRESSED HALO'S ARGUMENT?
A. Yes. The FCC rejected Halo's argument about where calls originate in the Connect
America Order. Here is the FCC's discussion, which I quote at length because of its
importance:
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1003. In the Local Competition First Report and Order, theCommission stated that calls between a LEC and a CMRS providerthat originate and terminate within the same Major Trading Area(MTA) at the time that the call is initiated are subject to reciprocalcompensation obligations under section 251(b)(5), rather thaninterstate or intrastate access charges. As noted above, this rule,referred to as the "intraMTA rule, "also governs the scope oftraffic between LECs and CMRS providers that is subject tocompensation under section 20.11(b). The USF/ICCTransformation NPRM sought comment, inter alia, on the properinterpretation of this rule.
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1004. The record presents several issues regarding the scope andinterpretation of the intraMTA rule. Because the changes we adoptin this Order mmntain, during the transition, distinctions in thecompensation available under the reciprocal compensation regimeand compensation owed under the access regime, parties mustcontinue to rely on the intraMTA rule to define the scope of LEC-CMRS traffic that falls under the reciprocal compensation regime.We therefore take this opportunity to remove any ambiguityregarding the interpretation of the intraMTA rule.
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1005. We first address a dispute regarding the interpretation of theintraMTA rule. Halo Wireless (Halo) asserts that it offers"Common Carrier wireless exchange services to ESP andenterprise customers" in which the customer "connectswirelessly to Halo base stations in each MTA." It furtherasserts that its "high volume" service is CMRS because "thecustomer connects to Halo's base station using wireless equipmentwhich is capable of operation while in motion. " Halo argues that,for purposes of applying the intraMTA rule, "[t]he originationpoint for Halo traffic is the base station to which Halo'scustomers connect wirelessly. " On the other hand, ERTA claims
The FCC cited two Halo exparte filings for this description, which make clear that the alleged ESP isTranscom. For reference, I attach Halo's two ex partes as Exhibit JSM-6 and Exhibit JSM-7.
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PSC Docket No. 2011-304-C
1
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that Halo's traffic is not from its own retail customers but is insteadfiom a number of other LECs, CLECs, and CMRS providers.NTCA further submitted an analysis of call records for callsreceived by some of its member rural LECs from Haloindicating that most of the calls either did not originate on aCMRS line or were not intraMTA, and that even if CMRSmight be used "in the middle, " this does not affect thecategorization of the call for intercarrier compensationpurposes. These parties thus assert that by characterizing accesstraffic as intraMTA reciprocal compensation traffic, Halo is failingto pay the requisite compensation to terminating rural LECs for avery large amount of traffic. Responding to this dispute, CTIAasserts that "it is unclear whether the intraMTA rules would even
apply in that case."
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1006. We clarify that a call is considered to be originated by aCMRS provider for purposes of the intraMTA rule only if thecalling party initiating the call has done so through a CMRSprovider. Where a provider is merely providing a transitingservice, it is well established that a transiting carrier is notconsidered the originating carrier for purposes of the reciprocalcompensation rules. Thus, we agree with NECA that the "re-origination" of a call over a wireless link in the middle of thecall path does not convert a wireline-originated call into aCMRS-originated call for purposes of reciprocal compensationand we disagree with Halo's contrary position. (Emphasisadded, footnotes omitted). '
2728 Q. BASED ON YOUR PARTICIPATION IN THE PAIW.LLEL CASES INVOLVING
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AT&T ILECS AND HALO IN OTHER STATES, DOES HALO AGREE THAT
THE FCC HAS REJECTED HALO'S THEORY THAT ALL CALLS
ORIGINATE WITH TRANSCOM?
32 A. No. Halo has claimed that the FCC has not rejected its theory, or that the FCC
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misunderstood the facts. I will leave the debate about the legal interpretation of the
FCC's Order to the attorneys and legal briefs. In my layman's opinion, however, the
Connect America Fund, FCC 11-161,2011 WL 5844975 (rel. Nov. 18, 2011)("Connect America Order" ).
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FCC clearly was aware of Halo's and Transcom's network arrangements and of Halo's
argument that all calls it sends to ILECs "originate"' with Transcom even though they
start with another carrier, and the FCC rejected Halo's theory.
5 Q. PLEASE EXPLAIN.
6 A. In paragraph 1005 of the Connect America Order the FCC stated that "Halo Wireless
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(Halo) asserts that it offers 'Common Carrier wireless exchange services to ESP and
enterprise customers' in which the customer 'connects wirelessly to Halo base stations in
each MTA. ' [fn. 2120]. . . . Halo argues that, for purposes of applying the intraMTA
rule, '[t]he origination point for Halo traffic is the base station to which Halo's customers
[i.e., the alleged ESP] connect wirelessly. [fn. 2122].'" The only alleged ESP customer
Halo has ever identified is Transcom.
Moreover, these descriptions of Halo's argument quote directly &om Halo's
August 12, 2011 exparte letter to the FCC, which the FCC cited in footnotes 2120 and
2122. I have attached that ex parte letter as Exhibit JSM-6. In that exparte letter, Halo
expressly argued that it has "[o]ne primary customer [i.e., Transcom]" and that all of the
traffic Halo sends to other carriers "originates from [that] customer. " Exhibit JSM-6 at 7.
Halo also argued to the FCC that "[t]he customer [i.e. , Transcom] is originating calls to
Halo" and that "[t]he origination point for Halo traffic is the base station to which Halo's
customers [i.e., Transcom] connect wirelessly. " Id. at 8-9. The FCC also relied on
Halo's October 17, 2011 exparte presentation to the FCC. See Exhibit JSM-7, cited in
Connect America Order, $ 1005 n.2120. Halo was equally explicit in that letter, arguing
that "Halo's 'high volume' customer [i.e. , Transcom] is an end user" and therefore
PSC Docket No. 2011-304-C
"[e]very Halo-related call that the ILECs are terminating is originated by Transcom. "
Exhibit JSM-7 at 2.
Given Halo's clear statements in its ex parte presentations, and the FCC's reliance
on those ex partes, the FCC was well aware of Halo's "ESP,""end user, "and
"origination" theories, and rejected them. The Tennessee Regulatory Authority also
recognized this in its decision for AT&T Tennessee in a parallel case against Halo:
789
101112131415
The Authority has reviewed Halo's ex parte filings with the FCCin the Connect America Fund docket, where the description ofHalo's and Transcom's operations is the same as has beenpresented to the TRA in this proceeding. Indeed, reviewing the exparte filings made by Halo makes it clear that the FCC was awareofHalo's assertion that it provided service to ESPs using wirelesstechnology. In the resulting Connect America Fund Order, theFCC addressed and rejected Halo's assertion that the traffic 6omits customer Transcom is wirelessly originated.
16 Exhibit JSM-8 at 15.
17
18 Q. HALO HAS CONTENDED ELSEWHERE THAT THE FCC ACTUALLY
19
20
DEEMED THE TRAFFIC THAT HALO PASSES ON TO ILECS TO BE NON-
ACCESS TRAFFIC. DO YOU AGREE?
21 A. No. It is absolutely clear that in paragraphs 1005 and 1006 of the Order, which I quoted
22
23
24
25
26
27
above, the FCC was saying that the traffic that Halo was claiming was non-access traffic
was in reality access traffic. Indeed, that is the very point the FCC was making. Halo
has argued that when the FCC used the term "transiting" in paragraph 1006, it was using
it in the same sense as when it later defined transit service, in an entirely separate part of
the Order discussing an entirely different issue, as involving "non-access traffic. " Based
on this, Halo contends that its traffic cannot be subject to access charges. Given how
20
PSC Docket No. 2011-304-C
clear it is that the FCC was saying in paragraphs 1005 and 1006 that the traffic at issue
was access traffic, Halo's suggestion that the FCC meant exactly the opposite based on
something the FCC said in an entirely different part of the Order is absurd. Moreover,
the primary issue in this case is whether the traffic Halo has been sending to AT&T South
Carolina is landline-originated, and Halo's argument about the term "transiting" has
nothing to do with that point.
8 Q. WHAT IS THE BASIS FOR ATdkT SOUTH CAROLINA'S REQUEST THAT
10
THE COMMISSION RULE THAT HALO MUST PAY ATILT SOUTH
CAROLINA ACCESS CHARGES?
12 A. As demonstrated above, Halo is sending ATILT South Carolina interexchange landline
13
14
15
16
17
18
traffic on which Halo has been paying reciprocal compensation (as if the traffic were
local) rather than the higher access charges that apply to interexchange traffic. ATILT
South Carolina is simply asking the Commission to rule that Halo owes access charges on
the interexchange traffic that ATILT South Carolina has terminated for Halo (minus a
credit for charges Halo has paid). ATILT South Carolina, however, is not asking the
Commission to determine how much Halo owes —that task is for the bankruptcy court.
19
20 Q. ARE THE ACCESS CHARGE RATES THAT HALO OWES SET FORTH IN
21 THE PARTIES' INTERCONNECTION AGREEMENT?
22 A. No, these are tariffed rates. ATILT South Carolina's federal tariff, filed with the FCC,
23 requires Halo to pay access charges on the interstate traffic ATES South Carolina has
21
PSC Docket No. 2011-304-C
terminated for Halo, and AT&T South Carolina's state tariff, filed with this Commission,
requires Halo to pay access charges on the intrastate non-local traffic AT&T South
Carolina has terminated for Halo.
5 Q. WHAT ARE THE PERTINENT PROVISIONS OF THE FEDERAL TARIFF?
6 A. BellSouth Telecommunications Tariff F.C.C. No. 1, Sections 6.8.1 and 6.8.2.
8 Q. WHAT ARK THE PERTINENT PROVISIONS OF THE STATE TARIFF?
9 A. BellSouth Telecommunications, Inc. South Carolina Access Services Tariff, sections
10 E6.8.1, E6.8.3, E6.8.6.
12 V. HALO'S BREACH OF ICA BY SENDING INACCURATE CALL13 DETAIL141516 Q. IN ADDITION TO VIOLATING THK TERMS OF THE ICA BY SENDING
17
18
LANDLINE TRAFFIC TO
ATILT,
HAS HALO BREACHED OTHER
PROVISIONS OF THK ICA?
19 A. Yes. Halo has violated the ICA by sending inaccurate call information.
20
21 Q. IS HALO REQUIRED TO PROVIDE ACCURATE CALL DETAIL
22
23
INFORMATION FOR THE TRAFFIC IT SENDS TO AT&T SOUTH
CAROLINA?
24 A. Yes. Section XIV.G of the ICA states:
2526
The parties will provide each other with the proper callinformation, including all proper translations for routing between
22
PSC Docket No. 2011-304-C
networks and any information necessary for billing whereBellSouth provides recording capabilities. This exchange ofinformation is required to enable each party to bill properly.
10
12
As Mr. Neinast describes in his testimony, Halo has sent traffic to ATILT South Carolina
that contained inaccurate call detail information. One of the major reasons carriers enter
into ICAs is to provide the terms and conditions under which the parties will exchange
traffic between their respective end users and to appropriately bill each other for that
traffic. Call detail information is used for determining the appropriate intercarrier
compensation due. Without proper call detail information, calls cannot be easily and
accurately analyzed by billing systems. Halo has breached the ICA by providing
inaccurate call detail.
13
14 Q. HALO HAS ARGUED IN OTHER STATES THAT INSERTING AN
15
16
17
18
INACCURATE CHARGE NUMBER MADE NO DIFFERENCE, BECAUSE THE
ICA USES FACTORS TO DETERMINE THK PERCENTAGE OF HALO
TRAFFIC THAT WILL BE BILLED AS LOCAL TRAFFIC VERSUS TOLL
TRAFFIC. PLEASE RESPOND.
19 A. The ICA does use factors to determine how much Halo traffic will be billed as
20
21
local traffic versus toll traffic, but these factors only apply to wireless traffic.
The ICA does not have any factor for landline traffic because the ICA does not
allow Halo to send any landline traffic to ATILT South Carolina in the first
23 place.
24
25
As for wireless traffic, while the ICA originally used a 1% factor to
treat 1%of the traflic &om Halo an interMTA (to11) traffic and the rest as local
23
PSC Docket No. 2011-304-C
10
12
13
14
15
traffic, that was only a default factor "[fjor Carriers that have not exchanged
traffic under a previous CMRS interconnection agreement with BellSouth or
for traffic categories that are not technically feasible to measure. " ICA Section
VII.E. The ICA provides that AT&T can unilaterally update the percentages
for purposes ofbilling switched access if it is technically possible for ATILT to
measure traffic for classification. AT8cT has determined that the PLU (percent
local usage factor) and the PIU (percent interstate usage factor) for the wireless
traffic that Halo has been sending to AT8.T are different than the default
percentages. Accordingly, AT8cT notified Halo that it intended to bill Halo
using updated factors for wireless traffic in its May 13, 2011 Demand Letter to
Halo. That letter communicated new factors to Halo for wireless traffic subject
to switched access rates, based upon actual traffic data. As that letter explains,
not only has Halo been improperly avoiding access charges on large amounts
of unauthorized landline traffic, but it also has been sending significantly more
interMTA wireless traffic than it told ATILT it would.
16
17 VI. HALO'S BREACH OF ICA BY FAILING TO PAY FOR FACILITIES
18 Q. WHAT IS AT&T SOUTH CAROLINA'S CLAIM CONCERNING FACILITIES
19 CHARGES?
20 A. Halo has purchased transport facilities from AT8cT South Carolina, and ATILT South
21
22
Carolina has provided those facilities pursuant to the terms of the ICA, but Halo has not
paid AT8cT South Carolina for those facilities.
23
24
PSC Docket No. 2011-304-C
1 Q. WHAT FACILITIES ARE IN DISPUTE?
2 A. Halo ordered —and AT&T South Carolina provisioned —DS3 and DS1 channelized
facilities, multiplexing for those channels, cross-connects to connect facilities Halo leased
&om a third party to the facilities Halo ordered from AT&T, as well as channel
terminations to two AT&T South Carolina switches.
7 Q. HOW MUCH DOES HALO OWE AT&T SOUTH CAROLINA FOR THE
FACILITIES IT OBTAINED FROM ATILT?
9 A. Even though Halo has ordered these facilities &om AT&T South Carolina and AT&T
10
12
South Carolina provided them, Halo has refused to pay AT&T South Carolina's invoices
for these facilities. As of December 31, 2011,AT&T had billed Halo $172,521.87 for the
use of these facilities and Halo had not paid any of that amount.
13
14 Q. WHAT IS THE BASIS FOR AT&T SOUTH CAROLINA'S CLAIM IN THE ICA?
15 A. Under the ICA, the costs for wireless facilities are apportioned based upon the percentage
16
17
18
19
20
21
22
of traf5c each carrier is responsible for. In this case, AT&T South Carolina is
responsible for the portion of traffic that originates with AT&T South Carolina end users
and is destined for Halo, while Halo is responsible for the portion of traffic Halo sends to
AT&T South Carolina for termination to AT&T South Carolina end users. Halo is also
responsible for any intermediary (transit) traffic exchanged between third party carriers
and Halo that is transported via these facilities. Section V.B.of the ICA addresses
"Interconnection Trunk Group Options" for facilities and provides:
2324
BellSouth and Carrier will share the cost of the two-way trunk
group carrying both Parties traffic proportionally when purchased
25
PSC Docket No. 2011-304-C
1
23456789
101112
via this Agreement or the General Subscriber Services Tariff,Section A35, or, in the case of North Carolina, in the NorthCarolina Connection and Traffic Interchange Agreement effectiveJune 30, 1994, as amended from time to time. BellSouth will bearthe cost of the two-way trunk group for the proportion of thefacility utilized for the delivery of BellSouth originated Localtraf5c to Carrier's POI within BellSouth's service territory andwithin the LATA (calculated based on the number of minutes oftrafIic identified as BellSouth's divided by the total minutes ofuseon the facility), and Carrier will provide or bear the cost of thetwo-way trunk group for all other traffic, including Intermediarytraf6c.
1314
15
The apportioning of facilities costs applies for the entire facility between ATILT South
Carolina's switch and Halos' switch.
17 Q. IS THIS THE SAME WAY FACILITIES COSTS ARE APPORTIONED IN CLEC
LANDLINE ICAS?
19 A. No. In landline CLEC ICAs, each carrier is solely financially responsible for all of the
20
21
22
23
24
25
26
facilities on its respective side of the Point of Interconnection ("POI"). For example, in
an ICA between ATILT South Carolina and ABC CLEC, the parties would agree upon
the location of a POI for purposes of interconnection, and each carrier would then
provision its own facilities &om its switch to that POI. The POI is the demarcation
indicating the distinct networks of each carrier. Wireless interconnection, as I just
discussed, does not apply this methodology, but instead provides that each carrier share
the costs of the entire facility, based upon their respective usage of that facility.
27
26
PSC Docket No. 2011-304-C
1 Q. WITH RESPECT TO HALO'S INTERCONNECTION, WHAT IS THE
PROPORTION OF THE FACILITY COSTS ASSIGNED TO HALO BASED
UPON SECTION V.B.OF THE ICA?
4 A. Halo is responsible for 100/0 (or very close to 100'/0) of the facilities costs as AT&T
South Carolina originates no (or very little) traffic destined to Halos' switch. "Nearly all
of the traffic exchanged between Halo and ATILT South Carolina comes &om Halo and
is destined for termination by ATE~T South Carolina or a third party carrier subtending
AT8~;T South Carolina's tandem switch.
10 Q. GIVEN THAT HALO IS RESPONSIBLE FOR NEARLY 100 /o OF THE
12
13
FACILITIES COSTS, DOES THK ICA PROVIDE FOR HOW HALO WILL BE
BILLED FOR ANY PORTIONS OF THAT FACILITY THAT ATILT HAS
PROVISIONED?
14 A. Yes. Section VI.B., "Compensation of Facilities, "of the ICA provides how Halo is to be
15
16
billed for the facilities it orders from ATILT South Carolina. Specifically, VI.B.2.b
states:
171819202122
BellSouth will bill Carrier for the entire cost of the facility. Carrierwill then apply the BellSouth originated percent against the LocalTraf5c portion of the two-way interconnection facility chargesbilled by BellSouth to Carrier. Carrier will invoice BellSouth on amonthly basis, this proportionate cost for the facilities utilized byBellSouth.
23
1 say 100lo or nearly 100/o based upon recorded data for Halo's traffic. For example, the January 2012usage data shows AT&T sent just 435 MOUs to Halo across the entire nine-state AT&T Southeast Region.
27
PSC Docket No. 2011-304-C
1 Q. HALO CONTENDED IN ANOTHER PROCEEDING THAT IT PROVIDES ITS
OWN INTERCONNECTION FACILITIES, OBTAINED FROM A THIRD
PARTY, AND THAT HALO THEREFORE DOES NOT OWE FACILITIES
CHARGES TO AT&T SOUTH CAROLINA. DO YOU AGREE?
5 A. No, I do not. While it may very well be true that Halo has provisioned some of its own
10
12
13
14
interconnection facilities leased from a third party, Halo's facilities do not extend all the
way to ATILT South Carolina's switches. The entirety of the interconnection facility is
&om Halo's switch to AT&T South Carolina's switch, and Halo's facility does not quite
reach its destination. The charges in dispute are for the ATES South Carolina-provided
facilities that extend &om the end of Halo's facility (for example, at a third party
collocation cage where Halo's leased facility terminates) to AT8cT South Carolina's
switch ports. Though the facilities that ATILT South Carolina is providing to Halo may
all be within the confines of a single building, they are necessary in order to connect Halo
to ATES South Carolina for the purposes of exchanging traffic.
15
16 VII. CONCLUSION
17 Q. HOW SHOULD THE COMMISSION RULE IN THIS PROCEEDING?
18 A. The Commission should find that Halo has breached the parties' ICA by sending landline
19
20
traffic, by providing ATILT South Carolina incorrect call data, and by refusing to pay for
interconnection facilities.
21
22
PSC Docket No. 2011-304-C
1 Q. WHAT RELIEF IS AT8r T SOUTH CAROLINA SEEKING FROM THE
COMMISSION FOR HALO'S BREACHES OF THE ICA?
3 A. Subject to subsequent activity in the bankruptcy court, AT&T South Carolina
10
12
13
is asking the Commission to:
(a) Find that Halo has materially breached the ICA by (1) sending
landline-originated traffic to AT&T South Carolina, and (2) inserting incorrect
Charge Number information on calls;
(b) Find that as a result of these breaches (or either of them), AT&T
South Carolina is excused from further performance under the ICA and may
stop accepting traffic from Halo;
(c) Find, without quantifying any specific amount due, that Halo is
liable to AT&T South Carolina for access charges on the interstate and
interLATA landline traffic it has sent to AT&T South Carolina; and
14 (d) Grant all other relief as is just and appropriate.
15
16 Q. DOES THIS CONCLUDE YOUR DIRECT TESTIMONY?
17 A. Yes.
18 1025472
STATE OF SOUTH CAROLINA
COUNTY OF RICHLAND
)) CERTIFICATE OF SERVICE)
The undersigned, Nyla M. Laney, hereby certifies that she is employed by the
Legal Department for BellSouth Telecommunications, LLC d/b/a ATILT Southeast d/b/a
ATILT South Carolina ("ATILT") and that she has caused the Direct Testimony of J.
Scott McPhee in Docket No. 2011-304-C to be served upon the following on February
24, 2012:
M. John Bowen, Jr.Margaret M. FoxMcNair Law Firm, P.A.Post Office Box 11390Columbia, South Carolina 29211(South Carolina Telephone Coalition)(Electronic Mail)
John J. Pringle, Jr.Ellis, Lawhorne & Sims, P.A.1501 Main Street, 5' FloorPost Office Box 2285Columbia, South Carolina 29202(Halo Wireless, Incorporatd)(Electronic Mail)
Troy P. MajoueSteven H. ThomasJennifer M. Larson
McGuire, Craddock k Strother, P.C.2501 N. HarwoodSuite 1800Dallas, Texas 75201(Halo Wireless, Incorporated)(Electronic Mail)
W. Scott McColloughMcCollough Henry, P.C.1250 S. Capital of Texas Hwy. , Bldg. 2-235Westlake, Texas 78746(Halo Wireless, Incorporated)(Electronic Mail)
Nanette Edwards, EsquireOffice of Regulatory Staff1401 Main Street, Suite 900Columbia, South Carolina 29201(Electronic Mail)
F. David Butler, EsquireSenior CounselS. C. Public Service CommissionPost Office Box 11649Columbia, South Carolina 29211(PSC Staff)(Electronic Mail)
Joseph MelchersChief CounselS.C. Public Service CommissionPost Office Box 11649Columbia, South Carolina 29211(PSC Staff)(Electronic Mail)
Jocelyn G. Boyd, Esquire
Deputy ClerkS. C. Public Service Commission
Post Office Box 11649Columbia, South Carolina 29211(PSC Staff)(Electronic Mail)
M. Lane
926588
PUBLIC SERVICE COMMISSION OF WISCONSIN
Investigation into Practices of Halo Wireless, Inc. and TranscomEnhanced Services, Inc.
9594-TI-100
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING
I. Introduction.
During the November 23, 2011 prehearing conference, Halo Wireless, Inc. ("Halo" ) and
Transcom Enhanced Services, Inc. ("Transcom") agreed that for so long as doing so would not
constitute a waiver of their pending motions to dismiss, or any positions they have taken or will
take in this matter, they would provide a position statement and supporting factual information
under oath on Issues 1-8 as identified in the Notice of Proceeding. Administrative Law Judge
Newmark also made clear that, by providing such a position statement, neither Halo nor
Transcom would be precluded from providing additional information or arguments later in this
proceeding. Before we proceed to a specific answer to the individual issues, however, Halo and
Transcom will provide an explanation of their overall approach and positions.
Halo's position is that it is providing commercial mobile radio service ("CMRS")-based
telephone exchange service (as defined in the Communications Act of 1934, as amended by the
Communications Act of 1996 (the "Act"), 47 U.S.C. $ 153(47)) to end user customers, and all of
the communications at issue originate from end user wireless customer premises equipment
("CPE") (as defined in the Act, 47 U.S.C. $ 153(14))' that is located in the same MTA as the
terminating location. In other words, Halo contends that all of the traffic at issue is CMRS
intraMTA traffic that is subject to section 251(b)(5) of the Act. None of the traffic is associated
' Stated another way, the mobile stations (see 47 U.S.C. $ 153(28)) used by Halo's end user customers —includingTranscom —are not "telecommunications equipment" as defined in section 153(45)of the Act because the customersare not carriers. Halo has and uses telecommunications equipment, but its customers do not. They have CPE.HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING Page 11053969
with a telephone toll service provided by or to Halo or Transcom, so "exchange access" charges
cannot apply.
Section 153(48) defines "telephone toll service" as "telephone service between stations in
different exchange areas for which there is made a separate charge not included in contracts with
subscribers for exchange service. " For CMRS purposes, the "exchange" is the "Major Trading
Areas" ("MTA"). Halo is not providing service between stations in different exchange areas.
Halo does not collect any additional or separate charge other than the charges for exchange
service. Thus, Halo's service is not telephone toll service. Instead, it is telephone exchange
service. Exchange access charges cannot apply because only telephone toll is subject to
exchange access. See 47 U.S.C. $ 153(16); see also 47 C.F.R. $ 69.5(b). The "intercarrier
compensation" that applies is and must therefore be reciprocal compensation under section
251(b)(5), particularly since it has not been "carved out" by section 251(g). See Core Mandamus
Order; see also Bell Atlantic and Worldcom.
Transcom's position is that it is an enhanced/information service provider ("ESP").
Transcom provides "enhanced service" as that term is defined in 47 C.F.R. g 64.702(a).
Transcom's services also meet the definition of "information service" as defined in the Act, 47
U.S.C. $ 153(20). Transcom does not provide telecommunications ($ 153(43)), or any
See 47 C.F.R. gg 51.701(b)(2) and $ 24.202(a).
' Order on Remand and R&O and Order and FNPRM, High Cost Universal Service Reform, Federal-Stale JointBoard on Universal Service, Lifeline and Link Up, Universal Service Contribution Methodology, Numbering,Resource Optimization, Implementation of the Local Competition Provisions in the Telecommunications Act of1996, Developing a Unified Intercarrier Compensation Regime, Intercarrier Compensation for ISP-Bound Tragic,IP-Enabled Services, 24 FCC Red 6475 (2008) ("Core Mandamus Order" ) (subsequent history omitted).
Bell Atlantic Tel. Cos. v. FCC, 206 F.3d 1 (D.C. Cir. 2000).
W'orldcom v. FCC, 288 F.3d 429 (D.C. Cir. 2002).
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
Page 2
telecommunications service ($ 153(46)), and in particular, does not provide "telephone toll
service" () 153(4S)).
Four federal court decisions (the "ESP rulings" ) directly construed and then decided
Transcom's regulatory classification and specifically held that Transcom (1) is not a carrier; (2)
does not provide telephone toll service or any telecommunications service; (3) is an end user; (4)
is not required to procure exchange access in order to obtain connectivity to the public switched
telephone network ("PSTN"); and (5) may instead purchase telephone exchange service just like
any other end user. True and correct copies of the ESP rulings are attached as Exhibits 1-4.
Three of these decisions were reached after the so-called "IP-in-the-Middle" and "ATILT Calling
Card" orders and expressly took them into account.
While those federal court positions do not of course bind the non-ATES T incumbent local
exchange carriers ("ILECs") or this Commission, Halo and Transcom submit that it was and is
eminently reasonable for Halo and Transcom to rely on these decisions as the basis for their
positions. No law has changed since they were issued. No court has held to the contrary. The
Federal Communications Commission ("FCC") has not held to the contrary. The Commission
might choose to reach a different result (although Halo and Transcom firmly believe it should
not, and in fact, cannot reach the issue), but any such decision could have only prospective
effect.
See Order, In the Matter of Petition for Declaratory Ruling that AT& T's Phone-to-Phone IP Telephony Servicesare Exempt from Access Charges, WC Docket No. 02-361, FCC 04-97, 19 FCC Rcd 7457 (rel. April 21, 2004)("AT&TDeclaratory Ruling" also known as "IP-in-the-Middle" ); Order and Notice of Proposed Rulemaking, In theMatter of AT&T Corp. Petition for Declaratory Ruling Regarding Enhanced Prepaid Calling Card ServicesRegulation ofPrepaid Calling Card Services, WC Docket Nos. 03-133, 05-68, FCC 05-41, 20 FCC Rcd 4826 (rel.Feb. 2005) ("AT&T Calling Card Order" ).
AT&T was a party to both of the federal court cases and is therefore bound by them. Halo and Transcom assertthat AT&T is collaterally estopped from taking any position that is inconsistent with the result of those cases.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING Page 31053969
Halo and Transcom further assert that once one begins to look at Halo's services from the
lens of a CMRS provider, supplying telephone exchange service to an end user via wireless CPE
located in the same MTA as the terminating location, all of the arguments and accusations of the
local exchange carrier ("LEC")antagonists are simply misplaced.
II. Halo's Business Model.
Halo's business model contemplates service to two classes of customers: (I) individual
and enterprise end users in unserved or underserved rural locations ("consumer end users") and
(2) high-volume end users ("High Volume end users"). Everyone in the telecommunications
industry recognizes the financial challenges of delivering broadband to rural areas —the entire
current discourse relating to universal service relates in substantial part to this issue. Major
wireless carriers have substantial funds for investment and marketing, but absorption rates and
rates of return in rural areas make such investments unattractive without subsidies. Halo's
business model is designed to deliver 4G WiMAX broadband voice and data services to
unserved and underserved rural areas without taxpayer dollars or subsidies. Halo's consumer
offering is being marketed on an Internet model by which users are provided with "beta"
products and services to instill trust and brand loyalty, and then charges will be applied as
customers become entrenched. Currently, Halo has approximately fifty consumer customers,
around the nation, none of which have yet been converted to a payment relationship because
Halo has been overwhelmed with litigation and unable to devote sufficient time and resources to
further develop this product. Meanwhile, the costs of operating, network development and
marketing are supported by High-Volume traffic.
As a commercial mobile radio service, Halo lawfully can provide telephone exchange
service to high-volume end users such as ESPs and enterprise customers. Currently, the only
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
Page 4
such customer is Transcom, and traffic from Transcom provides 100 percent of Halo's current
revenues because, again, Halo has been engulfed with litigation and has been unable to market
and sign up additional customers in the High Volume market.
The primary concern mentioned by the Commission when initiating this current action
was the reports from ILECs that some of the calls handled by Halo began on the PSTN
elsewhere in the nation. There should be no surprise in this. The ESP rulings establish that
Transcom is an ESP even for calls that begin and end on the PSTN because Transcom changes
the content of every call that passes through its system, and Transcom offers enhanced
capabilities, The ESP rulings expressly make these facts clear. Clearly, the ILECs disagree
with the ESP rulings, but the ESP rulings are very clear on these issues and Transcom and Halo
' As noted, three of the four ESP rulings were decided after the "IP-in-the-Middle" order and the first AT&T CallingCard order. The court recognized that some of Transcom's traffic does start on the PSTN and also ends on thePSTN. The court, however, found that the FCC's test expressly requires more: there must also not be a change incontent and no offer of enhanced service and the provider must be a common carrier in order for the service to betelephone toll and subject to access. IP-in-the-Middle, at 7547-754S ("We emphasize that our decision is limited tothe type of service described by AT&T in this proceeding, i.e., an interexchange service that: (1) uses ordinarycustomer premises equipment (CPE) with no enhanced functionality; (2) originates and terminates on the publicswitched telephone network (PSTN); and (3) undergoes no net protocol conversion and provides no enhancedfunctionality to end users due to the provider's use of IP technology. Our analysis in this order applies to servicesthat meet these three criteria regardless of whether only one interexchange carrier uses IP transport or insteadmultiple service providers are involved in providing IP transport. "); 7465 ("AT&T offers 'telecommunications'because it provides 'transmission, between or among points specified by the user, of information of the user'schoosing, without change in the form or content of the information as sent and received. ' And its offering constitutesa 'telecommunications service' because it offers 'telecommunications for a fee directly to the public, ' Users ofAT&T's specific service obtain only voice transmission with no net protocol conversion, rather than informationservices such as access to stored files. More specifically, AT&T does not offer these customers a 'capability forgenerating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available informationtherefore, its service is not an information service under section 153(20)of the Act. End-user customers do not ordera different service, pay different rates, or place and receive calls any differently than they do through AT&T'straditional circuit-switched long distance service; the decision to use its Internet backbone to route certain calls ismade internally by AT&T. To the extent that protocol conversions associated with AT&T's specific service takeplace within its network, they appear to be 'internetworking' conversions, which the Commission has found to betelecommunications services. We clarify, therefore, that AT&T's specific service constitutes a telecommunicationsservice. " (notes omitted) TDS et al. conveniently ignore the additional required elements they do not like,particularly the fact that Transcom's service changes content and therefore cannot be "telecommunications" underthe federal definition, and equally importantly that Transcom has never held out as a common carrier.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-$ IN THE NOTICE OF PROCEEDING1053969
Page 5
have a right to rely on the ESP rulings. Transcom therefore receives some calls from its
customers that began elsewhere on the PSTN. But it does not matter. Under Bell Atlantic,
8'orldcom, and a host of other precedent reaching back to Value Added Networks and Leaky
PBXs, the ESP is an end user and thus is deemed to be a call "originator" for intercarrier
compensation purposes.
TDS, et al. , deny Transcom's status as an ESP and falsely accuse it of providing "IP-in-
the-Middle" —even though the ESP Orders directly rejected ATILT's similar argument —as a
pretext for imposing exchange access charges on the subject traffic. This is how they can claim
that Transcom is merely "re-originating" traffic and that the "true" end points for its calls are
elsewhere on the PSTN. In making this argument, however, TDS, et al. , are advancing the exact
position that the D.C. Circuit rejected in Bell Atl. Tel. Cos. v. FCC, 206 F.3d 1 (D.C. Cir. 2000).
In that case, the D.C. Circuit held it did not matter that a call received by an ISP is
instantaneously followed by the origination of a "further communication" that will then
"continue to the ultimate destination" elsewhere. The Court held that "the mere fact that the ISP
originates further telecommunications does not imply that the original telecommunication does
not 'terminate' at the ISP." In other words, the D.C. Circuit clearly recognizes —and
functionally held —that ESPs are an "origination" and "termination" endpoint for intercarrier
compensation purposes (as opposed tojurisdictional purposes, which does use the "end-to-end"
test).
The traffic here "terminates" with Transcom, and then Transcom "originates" a "further
communication" in the MTA. In the same way that ISP-bound trafficPom the PSTN is immune
from access charges (because it is not "carved out by ) 251(g) and is covered by g 251(b)(5)),
Transcom also has a very significant and growing amount of calls that originate from IP endpoints. Those areobviously not "IP-in-the-Middle" under even the test advanced by TDS et al.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
Page 6
the call to the PSTN is also immune. Enhanced services were defined long before there was a10
public Internet. ESPs do far more than just hook up "modems" and receive calls. They provide a
wide set of services and many of them involve calls to the PSTN. " The FCC observed in the
first decision that created what is now known as the "ESP Exemption" that ESP use of the PSTN
resembles that of the "leaky PBXs" that existed then and continue to exist today, albeit using
much different technology. Even though the call started somewhere else, as a matter of law a
Leaky PBX is still deemed to "originate" the call that then terminates on the PSTN. ' As noted,
the FCC has expressly recognized the bidirectional nature of ESP traffic, when it observed that
ESPs "may use incumbent LEC facilities to originate and terminate interstate calls" (emphasis
added). Halo's and Transcom's position is simply the direct product of Congress' choice to
codify the ESP Exemption, and neither the FCC nor state commissions may overrule the statute.
In other proceedings, the ILECs have pointed to certain language in f[ 1066 of the FCC's
recent rulemaking that was directed at Halo, and the FCC's discussion of "re-origination. "That
language, however, necessarily assumes that Halo is serving a carrier, not an ESP. TDS told the
' The incumbents incessantly assert that the ESP Exemption applies "only" for calls "from" an ESP customer "to"the ESP. This is flatly untrue. ESPs "may use incumbent LEC facilities to originate and terminate interstate calls[.]"See NPRM, In the Matter ofAccess Charge Reform, 11 FCC Rcd 21354, 21478 (FCC 1996). The FCC itself hasconsistently recognized that ESPs —as end users —"originate" traffic even when they received the call from someother end-point. That is the purpose of the FCC's finding that ESPs' systems operate much like traditional "leakyPBXs."
" See, Notice of Proposed Rulemaking, Third Report and Order, and Notice of Inquiry, In the Matter of AccessCharge Reform; Price Cap Performance Review for Local Exchange Carriers; Transport Rate Structure andPricing Usage of the Public Switched Network by Information Service and Internet Access Providers, CC DocketNos. 96-262, 96-263, 94-1, 91-213, FCC 96-488, 11 FCC Rcd 21354, 21478, $ 284, n. 378 (rel. Dec. 24, 1996);Order, Amendments ofPart 69 of the Commission 's Rules Relating to Enhanced Service Providers, CC Docket No.87-215, FCC 88-151, 3 FCC Rcd 2631, 2632-2633. $13 (rel. April 27 19SS); Memorandum Opinion and Order,MTS and WATS Market Structure, Docket No. 78-72, FCC 83-356, $$ 7S, 83, 97 FCC 2d 682, 711-22 (rel. Aug. 22,1983).
12See, Memorandum Opinion and Order, MTS and WATS Market Structure, Docket No, 7S-72, FCC 83-356, $$ 78,
83, 97 FCC 2d 682, 711-22 (rel. Aug. 22, 1983) [discussing "leaky PBX and ESP resemblance]; SecondSupplemental NOI and PRM, In 'the Matter ofMTS and WATS Market Structure, FCC 80-19S, CC Docket No. 7S-72, $ 63, 77 F.C.C.2d 224; 19SO FCC LEXIS 181 (rel. Apr. 1980) [discussing "leaky PBX"].
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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FCC that Transcom was a carrier, and the FCC obviously assumed —while expressly not ruling—
that the situation was as TDS asserted. This is clear from the FCC's characterization in the same
paragraph of the Halo's activities as a form of "transit. " "Transit" occurs when one carrier
switches traffic between two other carriers. Indeed, that is precisely the definition the FCC
provided in $ 1311 of the recent rulemaking. Halo simply cannot be said to be providing13
"transit" when it has an end user as the customer on side and a carrier on the other side.
Halo agrees that a call handed off from a Halo carrier customer would not be deemed to
originate on Halo's network. ' But Transcom is not a carrier, it is an ESP. The ESPs always
have "originated further communications" but for compensation purposes (as opposed to
jurisdictional purposes) the ESP is still an end-point and a call originator. Again, once one looks
at this from an "end user" customer perspective the call classification result is obvious. The FCC
and judicial case law is clear that an end user PBX "originates" a call even if the communication
initially came in to the PBX from another location on the PSTN and then goes back out and
terminates on the PSTN. '
""1311.Transit. Currentl transitin occurs when two carriers that are not directl interconnected exchan e non-access traffic b routin the traffic throu h an intermedia carrier's network. Thus, although transit is thefunctional equivalent of tandem switching and transport, today transit refers to non-access traffic, whereas tandemswitching and transport apply to access traffic. As all traffic is unified under section 251(b)(5), the tandemswitching and transport components of switched access charges will come to resemble transit services in thereciprocal compensation context where the terminating carrier does not own the tandem switch. In the Order, weadopt a bill-and-keep methodology for tandem switched transport in the access context and for transport in thereciprocal compensation context. The Commission has not addressed whether transit services must be providedpursuant to section 251 of the Act; however, some state commissions and courts have addressed this issue. "(emphasis added)
See $ 252(d)(2)(A)(i), which imposes the "additional cost" mandate on "calls that originate on the networkfacilities of the other carrier. "
' See, e.g. , Chartways Technologies, Inc. v. AT& T, 8 FCC Rcd 5601, 5604 (1993);Directel Inc. v. American Tel. &Tel. Co. , 11 F.C.C.R. 7554 (June 26, 1996); Gerri Murphy Realty, Inc. v, AT& T, 16 FCC Rcd 19134 (2001);AT& Tv. Intrend Ropes and Twines, Inc. , 944 F.Supp. 701, 710 (C.D. 111. 1996; American Tel. & Tel. Co. v. Jiffy LubeInt'l. , Inc. , 813 F. Supp. 1164, 1165-1170 (D. Maryland 1993); AT&T v. New York Human ResourcesAdministration, 833 F. Supp. 962 (S.D.N.Y. 1993); AT&T, v. Community Health Group, 931 F. Supp. 719, 723
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING Page 81053969
So Halo has an end-user customer —Transcom. Although this end user customer receives
calls from other places, for intercarrier compensation purposes the calls still originate on Halo's
network. That customer connects wirelessly to Halo. Transcom "originates" communications
"wirelessly" to Halo, and all such calls are terminated within the same MTA where Transcom
originated them (the system is set up to make sure that all calls are "intraMTA").
Halo's High Volume service is based on a solid legal foundation. But the ILECs have
asked the Commission to rule that Halo and Transcom are operating unlawfully in the State of
Wisconsin. In other words, the ILECs are not merely asking the Commission to overrule the
federal bankruptcy courts that issued Transcom's ESP rulings. The ILECs are asking the
Commission to hold that Transcom and Halo have no right to rely on the ESP rulings, never had
the right to rely on the ESP rulings, and are operating unlawfully in the state of Wisconsin
because they are relying on the ESP rulings.
If Halo and Transcom have the right to rely on Transcom's ESP rulings, however, then
there is nothing for the Commission to investigate. It may be that the ILECs want to re-litigate
the ESP issue, but there is no reason for the taxpayers of Wisconsin to incur the cost of re-
litigating those issues for the benefit of the ILECs. This is purely a private, commercial dispute.
If Transcom is an ESP and an end user, then the traffic is subject to section 251(b)(5). ILECs are
only entitled to reciprocal compensation (and then only after a proper request under 47 C.F.R.
20.11(e)).' The ILECs want to change the status quo such that Transcom will be considered a
carrier (and therefore they can collect more money). More than that, they want this Commission
(S.D. Cal. 1995);AT&T Corp. v. Fleming & Berkley, 1997 U.S. App. LEXIS 33674 *6-*16(9th Cir. Cal. Nov. 25,1997).
' If and when the new rules go into effect then the traffic will still be subject to $ 251(b)(5). The only question willbe whether it will be "bill and keep" under new f 51.713 or the kind of "non-access" defined by new f 51.701(b)(3)that requires "an arrangement in which each carrier receives intercarrier compensation for the transport andtermination of Non-Access Telecommunications Traffic." See new $ 51.701(e).
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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to rule that Transcom and Halo have been operating unlawfully from the beginning of Halo's
operations —that Transcom and Halo never had the right to rely on Transcom's ESP rulings —so
that the ILECs can recover access charges for all of Halo's past traffic.
Consider the ramifications of that request. National companies in regulated industries
relying on federal rulings as to their classifications would be extending their operations into
Wisconsin at their own peril if good faith reliance on such rulings would not immunize them
from claims or charges that they are operating unlawfully. To rule as the ILECs wish would be a
great disservice to the people of Wisconsin, not to mention a derogation of the rule of law.
III. S ecific Res onses to Issues.
1. What is the relationship of Halo Wireless, Inc. (Halo) and Transcom EnhancedServices, Inc. (Transcom)?
A. Corporate information for Halo 5'ireless, Inc.
Halo Wireless, Inc. is a Texas corporation. The company was formed on February 7,
2005. The chart provided below lists Halo's officers, directors and shareholders.
NameTimothy TerrellGary ShapiroScott BirdwellCarolyn MaloneJeff MillerRussell Wiseman
Halo Wireless, Inc. Officers,Title
Equity Interest holderEquity Interest holderEquity Interest holderSecretary / TreasurerChief Financial OfficerPresident
Directors and StockholdersPercentage of Stock Ownership
40%10%50%0%0%0%
Halo was authorized to do business in Wisconsin on February 22, 2010. A copy of the
Authorization is attached as Exhibit 5. Halo is also registered with the Commission and current
on all obligations as of October 26, 2011, according to Gary Evenson of the Telecommunications
Division.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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B. Corporate information for Transcom Enhanced Services, Inc.
Transcom Enhanced Services, Inc. is a Texas corporation. The company was formed in
1999. The chart provided below lists Transcom's officers, directors and shareholders.
Equity Interest holderEquity Interest holderand DirectorEquity Interest holderEquity Interest holderEquity Interest holderEquity Interest holderChief ExecutiveOfficer and Chairmanof Board of DirectorsPresident and ChiefOperating OfficerSecretary/TreasurerChief Financial OfficerDirector
RWH Group II, LtdJames O'Donnel1
Brooks ReedTranscom Investors, LLCFirst Capital Group of Texas III, LPRick WaghorneScott Birdwell
0.4%1.7%
35.1%16.7%19.2%
Britt Birdwell 0%
Carolyn MaloneJeff MillerBen Hinterlong
0%0%0%
Transcom Enhanced Services, Inc. Officers, Directors and Stockholders
Name Title Percentage of StockOwnership
12.8%14.1%
Transcom's only activity in Wisconsin is that it operates wireless end user CPE
proximate to the two base stations that support service delivery to an MTA with Wisconsin
territory. There is at present only one base station that is physically located within Wisconsin.
Transcom has no other physical presence in the state, does not market within the state, has no
customers in the state and has no employees in the state.
C. Services provided by Halo to Transcom and Consumers.
Halo's web site, www. halowireless. com, provides an overview of Halo's offerings. Halo
has two base stations that serve MTAs that include Wisconsin. These base stations support the
basis for service delivery to Halo's customers. The chart on the next page provides the
information for the two base stations.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THK NOTICE OF PROCEEDING1053969
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Base Station LocationDanville, ILNew Glarus, WI
Associated MTAMTA 3 —ChicagoMTA 20 —Milwaukee
State(s) servedIL, IN, MI, WI
WI
Halo's base stations are the wireless access points where it collects and delivers voice and
data traffic from end-user customers who purchase wireless services from Halo. These wireless
customers also purchase or lease wireless CPE (customer-owned or leased "stations") that when
sufficiently proximate to a base station allow them to communicate wirelessly with that base
station. The end user customer can then enjoy broadband Internet service. The consumer
offering includes a Voice over Internet Protocol ("VoIP") client that allows the user to originate
telecommunications within the MTA and to receive calls from the rest of the PSTN.
Under the Halo configuration, and with respect to voice services, only calls originated by
Halo customers that are connected to a base station in an MTA and where the called numbers are
also associated with a "rate center" within the same MTA, will be routed over ATILT
interconnection trunks for transport and termination in the same MTA. The Service Plan and17
underlying service architecture supporting the "High Volume" service provided to Transcom, for
example, is designed so that any communication addressed to a different MTA would fail, e.g. ,
not complete.
Halo's consumer product supports broadband Internet access. There is a "voice"
component that allows calls originated by Halo customers connecting to a base station within an
MTA and destined to a called party in a different MTA to be completed. The consumer product
also allows calls to and from Halo customers not accessing the Halo network at a base station
access point (e.g., customers accessing their voice services over another broadband Internet
The "High Volume" MSA with Transcom is explicit that the "service" purchased by Transcom is expresslydesigned so that it is wholly "intraMTA" in nature. This is how the "MTA Connect" and "LATA Connect" productsare designed.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES I-S IN THE NOTICE OF PROCEEDING Page 121053969
connection, much like other "over the top" VoIP products). These calls, however, are not routed
over the AT&T interconnection trunks. Rather, those calls are handled by an interexchange
carrier ("IXC")that provides telephone toll service to Halo. That IXC provider pays all access
charges that are due. In other words, when a LEC receives a Halo call for termination in an
MTA that has traversed an interconnection arrangement, the call (a) will have been originated by
an end user customer's wireless equipment communicating with the base station in that same
MTA, and (b) will, by design and default, be intraMTA as defined by the FCC's rules and its
decision that the originating point for CMRS traffic is the base station serving the CMRS
customer.
Halo's High Volume service offering has allowed for deployment of base stations in
cities located in MTAs, Halo consciously chose to go to small towns underserved by incumbent
operators for the deployment of these base stations. As a result, Halo can leverage common
infrastructure to provide wireless broadband voice and data services on a scale and at a price
other operators simply cannot because they must derive a return on investment from only one
market, whereas Halo will be active in two markets. Halo's detractors have claimed that Halo
does not serve, and has no intention of serving, "retail" wireless customers. If this were true, it
would make no sense to deploy base stations in rural locations. These sites are generally remote,
hard to get to, and backhaul services are limited and expensive, to name just a few challenges. '
If Halo had no intention of serving the people in these communities, Halo undoubtedly increased
operational complexity and increased operating costs in a material way by deploying in rural,
rather than more urban, locations.
" New Glaurus, for example, has a population of about 2,500. The incumbent is Mount Vernon TelephoneCompany, a TDS subsidiary. The fact that Halo has entered TDS' market and is attempting to compete not only fortelephone exchange and exchange access service, but also to provide broadband, likely explains some of theanimosity exhibited by TDS, in particular, in this matter.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING Page 131053969
2. Are Halo and/or Transcom terminating traffic in Wisconsin that they are notpaying compensation for? How many minutes per month is each terminating inWisconsin?
See response under Issue 3 below.
3. Are there legal and legitimate reasons for Halo or Transcom to not paycompensation for terminating traffic in Wisconsin?
A. Clarification as to "Terminating. "
Issues 2 and 3 refer to Halo and/or Transcom "terminating" traffic. Thus, they
technically refer to calls that originate on other carriers' networks in the MTA and are addressed
to Halo for delivery to Halo's end user Transcom (or other end users such as those using Halo's
consumer product). Halo has been assigned the following numbering resources with rate centers
in Wisconsin.~ i9
ThousandsBlock920-903-1608-535-1
Rate Center
AppletonMadison
MTA
2020
LATA
350354
DateAssigned2010-08-062010-08-06
Neither Halo nor Transcom are compensating any party for any call terminations
performed by Halo in the past twelve months. Transcom is an end user, and thus does not
"terminate" traffic. Under the FCC's rules and definitions, Halo is the terminating carrier
because Halo's "end office switch, or equivalent facility" performs the class 5 switching function
and then delivers the traffic to Halo's end user customer. Regardless, neither Halo nor Transcom
are presently seeking compensation for any termination function related to calls inbound to
Halo's network.
Halo also has numbering resources for MTA 3, which has some Wisconsin territory in it, but all of thoseresources are associated with rate centers in other states.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING Page 141053969
B. Response to actual concern.
Despite the reference to Halo and/or Transcom "terminating" traffic, it appears the
concern actually pertains to traffic originated by Transcom on Halo's network that is addressed
to end users served by other Wisconsin LECs. At the prehearing conference conducted on
November 23, 2011, Halo and Transcom were requested to provide data relating to the number
of minutes that were sent to Wisconsin LECs for termination to their end users by month, by
carrier for the last 12 months. ATILT requested that Transcom separately provide the number of
minutes originated through other providers that were terminated in Wisconsin. The requested
information is confidential, and is being provided under separate cover, in accordance with page
7, paragraph 7 of the Prehearing Conference Memorandum. Halo and Transcom note that they
were able to gather the required information in time to do only one report (rather than initially
producing aggregate information and then supplementing to show calls by terminating carrier),
and are producing the call data by month by OCN, for the 12 months ofNovember, 2010 through
the end of October, 2011.
Issues 2 and 3 assume that no compensation was paid by either Halo or Transcom to any
entity. This is not correct. First, Transcom does compensate the vendors that provide telephone
exchange service and telephone toll service to Transcom. Halo provides telephone exchange
service to Transcom and has been compensated by Transcom. Part of the contract (whether
explicit or implicit) between Transcom and each of its vendors is that the vendor is responsible
for any applicable intercarrier compensation —whether in the form of reciprocal compensation or
exchange access.
Transcom is an end user and is thus able to purchase telephone exchange service from LECs and CMRS providersas an end user. Nonetheless, Transcom does also purchase telephone toll service from IXCs as well.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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The question is particularly incorrect with regard to AT&T. Halo has paid AT&T
reciprocal compensation for all traffic that AT&T has terminated in Wisconsin. Halo has also
paid AT&T for the transit function it provides for calls that go to other Wisconsin LECs.
As to whether LECs other than AT&T have been paid for terminating Halo's originating
traffic, the answer is no. The legal and legitimate reason is that the other ILECs have not
properly invoked the federal mechanism that is a legal prerequisite to any compensation
obligation. If there is no interconnection agreement or request for an agreement, then "no
compensation is owed for termination" until such proper request is made. In other words, every
single one of the relevant rural local exchange carriers ("RLECs") could have begun receiving
compensation at any time, and could begin receiving compensation tomorrow, if they would
simply follow the required federal procedure.
As noted previously, under the current rules traffic that originates from a wireless end
user's station in the same MTA as the terminating location is "non-access" traffic" 'and is
subject to section 251(b)(5). Rule 20.11(d) prohibits LECs from imposing any tariff charges on
non-access traffic. CMRS providers do not have any obligation to seek or obtain section 252
" The FCC defined "non-access traffic" in T-Mobile note 6 as "traffic not subject to the interstate or intrastateaccess charge regimes, including traffic subject to section 251(b)(5) of the Act and ISP-bound traffic. "DeclaratoryRuling and Report and Order, In the Matter ofDeveloping a Unified Intercarrier Compensation Regime, T-Mobileet al. Petition for Declaratory Ruling Regarding Incumbent LEC Wireless Termination Tariffs, CC Docket 01-92,FCC 05-42, 20 FCC Rcd 4855 (2005) ("T-Mobile"). FCC rule 47 C.F.R. f 51.701(b)(2) provides that for CMRS-LEC purposes g 251(b)(5) applies to "Telecommunications traffic exchanged between a LEC and a CMRS providerthat, at the beginning of the call, originates and terminates within the same Major Trading Area, as defined in [47C.F.R.j g 24.202(a) ...."The wireless CPE being used by both High Volume and consumer end users is IP-based.Thus it could also be characterized as "telecommunications traffic exchanged between a LEC and anothertelecommunications carrier in Time Division Multiplexing (TDM) format that originates and/or terminates in IPformat and that otherwise meets the definitions in paragraphs (b)(1) or (b)(2) of this section. Telecommunicationstraffic originates and/or terminates in IP format if it originates from and/or terminates to an end-user customer of aservice that requires Internet protocolcompatible customer premises equipment. " The traffic originates and/orterminates in IP format because it originates from and/or terminates to an end-user customer of a service thatrequires Internet protocol-compatible customer premises equipment. Therefore, the traffic will still be "non-access"when and if the FCC's new rules go into effect under new 51.701(b)(3).Further, despite all the protestations of theILECs, the traffic does still meet the requirements in new 20.11(b), since —as shown above —it is "Non-AccessTelecommunications Traffic, as defined in $ 51.701 of this chapter. "
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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agreements prior to initiating service. Further, the binding federal rule —as set out in T-Mobile
—is that in the absence of an interconnection agreement, "no compensation is owed for
termination. " If an ILEC wants to be paid for terminating traffic on a prospective basis, the
ILEC has the right to send a letter to the CMRS provider and "request interconnection. " The
letter must also "invoke the negotiation and arbitration procedures contained in section 252 of
the Act." See 47 C.F.R. $ 20.11(e). From and after the date of a proper request, the CMRS
provider must pay reciprocal compensation to the ILEC using "the interim transport and
termination pricing described in $ 51.715." Halo not only recognizes that it has this obligation, it
has repeatedly corresponded with RLECs around the country specifically informing them of the
simple request they need to make in order to receive compensation. RLECs in Wisconsin and
elsewhere have refused to make the required request because they refuse to acknowledge that
Transcom is an ESP and an end user. They want to assume that Transcom is a carrier and that
access charges are owed. Transcom and Halo have the right to rely on Transcom's ESP rulings,
but the RLECs refuse to acknowledge that right.
4. Is the traffic terminated by Halo or Transcom actually wireless traffic? If not,what type of traffic is it? What type of compensation should apply to thistraffic?
The traffic at issue all originates from a Halo end user via wireless CPE that is physically
located in the same MTA as the terminating location. Thus, it is all subject to section 251(b)(5).
As noted above, "[u]nder the amended rules, however, in the absence of a request for an
interconnection agreement, no compensation is owed for termination. " T-Mobile, note 57.
Halo and Transcom believe that this responds to the Commission's inquiry. The traffic is
indeed "wireless, " and the compensation scheme has been described above. To the extent that
T-Mobile at Note 57 expressly provides that "Under the amended rules, however, in the absence of a request foran interconnection agreement, no compensation is owed for termination. "
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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the Commission was looking for any other information, Halo and Transcom stand ready to
respond.
5. Are Halo and Transcom taking actions to disguise the origin and type of traffic?
Halo and Transcom assume that this issue is directed at signaling, since some of the
LECs have incorrectly, and without basis, asserted that Halo and/or Transcom are engaging in
some kind of impropriety with regard to SS7 signaling.
The short answer is no. Neither Transcom nor Halo change the content or in any way
"manipulate" the address signal information that is ultimately populated in the SS7 ISUP IAM
Called Party Number ("CPN") parameter. Halo populates the Charge Number ("CN") parameter
with the Billing Telephone Number of its end user customer Transcom. The LECs allege
improper modification of signaling information related to the CN parameter, but the basis of this
claim once again results from their assertion that Transcom is a carrier rather than an end user.
Again, they are arguing that Transcom and Halo do not have the right to rely on Transcom's ESP
rulings.
Halo's network is IP-based, and the network communicates internally and with customers
using a combination of WiMAX and SIP. To interoperate with the SS7 world, Halo must
conduct a protocol conversion from IP to SS7 and then transmit call control information using
SS7 methods. The ILECs' allegations fail to appreciate this fact, and are otherwise technically
incoherent. They reflect a distinct misunderstanding of technology, SS7, the current market, and
most important, a purposeful refusal to consider this issue through the lens of CMRS telephone
exchange service provided to an end user.
From a technical perspective, "industry standard" in the United States is American
National Standards Institute ("ANSI") T1.113, which sets out the semantics and syntax for SS7-
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
Page 18
based CPN and CN parameters. The "global" standard is contained in ITU-T series Q.760-
Q.769. ANSI T1.113describes the CPN and CN parameters:
Calling Party Number. Information sent in the forward direction to identify thecalling party and consisting of the odd/even indicator, nature of address indicator,numbering plan indicator, address presentation restriction indicator, screeningindicator, and address signals.
Charge Number. Information sent in either direction indicating the chargeablenumber for the call and consisting of the odd/even indicator, nature of addressindicator, numbering plan indicator, and address signals.
The various indicators and the address signals have one or more character positions
within the parameter and the standards prescribe specific syntax and semantics guidelines. The
situation is essentially the same for both parameters, although CN can be passed in either
direction, whereas CPN is passed only in the forward direction. The CPN and CN parameters
were created to serve discrete purposes and they convey different meanings consistent with the
design purpose. For example, CPN was created largely to make "Caller ID" and other CLASS-
based services work. Automatic Number Identification ("ANI") and CN, on the other hand, are
pertinent to billing and routing.
A. SS7ISUP IAM Calling Party Number Parameter Content.
Halo's signaling practices on the SS7 network comply with the ANSI standard with
regard to the address signal content. Halo's practices are also consistent with the Internet
Engineering Task Force ("IETF")"standards" for Session Initiated Protocol ("SIP")and SIP to
Integrated Services Digital Network ("ISDN") User Part ("ISUP") mapping. Halo populates the
SS7 ISUP IAM CPN parameter with the address signal information that Halo has received from
its High Volume customer (Transcom). Specifically, Halo's practices are consistent with the
IETF Request for Comments ("RFCs") relating to mapping of SIP headers to ISUP parameters.
See, e.g. , G. Camarillo, A. B.Roach, J. Peterson, L. Ong, RFC 3398, Integrated Services Digital
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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Network (ISDN) User Part (ISUP) to Session Initiation Protocol (SIP) Mapping, 0 The Internet
Society (2002), available at htt://tools. ietf. or /html/rfc3398.
When a SIP INVITE arrives at a PSTN gateway, the gateway SHOULD attemptto make use of encapsulated ISUP (see [3]), if any, within the INVITE to assist inthe formulation of outbound PSTN signaling, but SHOULD also heed the securityconsiderations in Section 15. If possible, the gateway SHOULD reuse the valuesof each of the ISUP parameters of the encapsulated IAM as it formulates an IAMthat it will send across its PSTN interface. In some cases, the gateway will beunable to make use of that ISUP - for example, if the gateway cannot understandthe ISUP variant and must therefore ignore the encapsulated body. Even whenthere is comprehensible encapsulated ISUP, the relevant values of SIP headerfields MUST 'overwrite' through the process of translation the parameter valuesthat would have been set based on encapsulated ISUP. In other words, the updatesto the critical session context parameters that are created in the SIP network takeprecedence, in ISUP-SIP-ISUP bridging cases, over the encapsulated ISUP, Thisallows many basic services, including various sorts of call forwarding andredirection, to be implemented in the SIP network.
For example, if an INVITE arrives at a gateway with an encapsulated IAM with aCPN field indicating the telephone number +12025332699, but the Request-URIof the INVITE indicates 'tel:+15105550110', the gateway MUST use thetelephone number in the Request-URI, rather than the one in the encapsulatedIAM, when creating the IAM that the gateway will send to the PSTN. Furtherdetails of how SIP header fields are translated into ISUP parameters follow.
B. SS7 ISUP IAM Charge Number Parameter Content.
Halo's high volume customer will sometimes pass information that belongs in the CPN
parameter that does not correctly convey that the Halo end user customer is originating a call in
the MTA. When this is the case, Halo still populates the CPN, including the address signal field
with the original information supplied by the end user customer. Halo, however, also populates
the CN parameter. The number appearing in the CN address signal field will usually be one
assigned to Halo's customer and is the Billing Account Number, or its equivalent, for the service
provided in the MTA where the call is processed. In ANSI terms, that is the "chargeable
number. " This practice is also consistent with the developing IETF consensus and practices and
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THK NOTICE OF PROCEEDING1053969
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capabilities that have been independently implemented by many equipment vendors in advance
of actual IETF "standards. "
SIP "standards" do not actually contain a formal header for "Charge Number. " Vendors
and providers began to include an "unregistered" "private" header around 2005. The IETF has
been working on a "registered" header for this information since 2008. See D. York and T.
Asveren, SIPPING Internet-Draft, P-Charge-Info - A Private Header (P-Header) Extension to
the Session Initiation Protocol (SIP) (draft-york-sipping-p-charge-info-01) 0 The IETF Trust
(2008), available at htt://tools. ietf. or /html/draft- ork-si in - -char e-info-01 (describing "'P-
Charge-Info', a private Session Initiation Protocol (SIP) header (P-header) used by a number of
equipment vendors and carriers to convey simple billing information. "). The most recent draft
was released in September, 2011.See D. York, T. Asveren, SIPPING Internet-Draft, P-Charge-
Info —2 Private Header (P-Header) Extension to the Session Initiation Protocol (SIP) (draft-
york-sipping-p-charge-info-12), 2011 IETF Trust, available at h://www. ietf.or id/draft-
ork-si in - -char e-info-12. txt. Halo's practices related to populating the Halo-supplied BTN
for Transcom in the SS7 ISUP IAM CN parameter are quite consistent with the purposes for and
results intended by each of the "Use Cases" described in the most recent document.
Halo notes that, with regard to its consumer product, Halo will signal the Halo number
that has been assigned to the end user customer's wireless CPE in the CPN parameter. There is
no need to populate the CN parameter, unless and to the extent the Halo end user has turned on
call forwarding functionality. In that situation, the Halo end user's number will appear in the CN
parameter and the E.164 address of the party that called the Halo customer and whose call has
been forwarded to a different end-point will appear in the CPN parameter. Once again, this is
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perfectly consistent with both ANSI and IETF practices for SIP and SS7 call control signaling
and mapping.
Halo is not taking any action to "disguise" anything. Instead, Halo is exactly following
industry practice applicable to an exchange carrier providing telephone exchange service to an
end user, and in particular a communications-intensive business end user with sophisticated CPE.
Transcom, as noted, also has an IP-based system. Nonetheless, Transcom has had a firm
policy since at least 2003 that it will not in any way change or manipulate the information that
belongs in the SS7 ISUP IAM CPN parameter address signal. Transcom has always and will
always maintain the address signal content and pass it on unchanged, albeit after the protocol
conversion from IP to SS7 where necessary, which would be the case when Transcom and its
PSTN vendor connect via "TDM" instead of on an IP basis. As noted, however, Transcom and
Halo communicate via IP.
6. Do Halo's actions conflict with the terms of its ICA with Wisconsin Bell, Inc.,d/b/a AT&T Wisconsin?
A. Jurisdiction,
Halo has an interconnection agreement ("ICA") with Wisconsin Bell, Inc. d/b/a AT&T
Wisconsin ("AT&T Wisconsin" ). Ifthere is a dispute between Halo and AT&T and ifone or the
other files a "post-ICA" dispute case and if the Commission has jurisdiction to resolve the
dispute, then presumably it will do so. But, the Commission lacks any authority to take up the
question of a breach and make a "determination" on that issue as part of a Commission-initiated
inquiry, such as this case. The Commission most certainly cannot look at the ICA and "find"
some duty to other LECs that runs to their benefit, since the ICA has an express provision (GTC
$ 2S) stating that "[t]his Agreement shall not provide any person not a Party to this Agreement
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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with any remedy, claim, liability, reimbursement, claim of action, or other right in excess of
those existing without reference to this Agreement. "
Post-ICA disputes are handled under section 252 of the Act. Traditionally, these are bi-
lateral cases, and only the parties to the contract (here AT&T Wisconsin and Halo) are permitted
to participate. The Commission did not specifically list section 252 as one of the bases for its
jurisdiction in this matter, and Halo submits that was correct since neither Halo nor AT&T has
invoked dispute resolution under section 252, which is a necessary prerequisite. And, the
legislature has expressly stated that the Commission's authority to resolve ICA disputes does not
extend to ICAs to which a CMRS provider is a party. Wis. Stat, sec. 196.199 (1). Regardless,
and without any waiver of the foregoing, Halo submits that there has been no breach and Halo's
"actions" are fully consistent with the ICA terms.
B. Substance.
Any allegation of breach is purely based upon the LECs' desire to disregard Transcom's
ESP rulings. AT&T has alleged in other jurisdictions that Halo has breached the relevant ICA
because the traffic Halo is sending "is not wireless. " This allegation is based wholly on the
assertion that the traffic in question began elsewhere on the PSTN. In other words, the allegation
of breach assumes that Transcom is a carrier, not an end user. If Transcom is an end user (as its
ESP rulings establish), then the traffic is wireless and there has been no breach.
7. Is Halo or Transcom operating or providing services in Wisconsin withoutproper certification from the Commission? Are Halo and Transcom operatingor providing services, jointly or in concert, in Wisconsin without propercertification from the Commission?
Transcom is not a carrier and does not provide any telecommunications service in
Wisconsin. Instead, Transcom is an ESP. The FCC preempted states from imposing common
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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carrier regulation on non-common carrier ESPs long ago and the 1996 amendments extended this
preemption to all enhanced/information services.
Section 332(c)(3) of the Act expressly preempts state regulation of CMRS entry or rates.
Equally important, Wisconsin law does not support the proposition that a CMRS provider or an
ESP must secure a state certification, in any event. CMRS is specifically exempted from
certification. Wis. Stat. $ 196.202 (2). ESPs do not provide telecommunications, and only
telecommunications providers are potentially subject to certification requirements under state
law. Finally, and with specific regard to Transcom (as opposed to Halo), Transcom is not
providing any service to any Wisconsin customers. While it is true that Transcom originates
calls that terminate in Wisconsin, Transcom does not have a customer in Wisconsin. Thus, it
simply cannot be said that Transcom provides service "in" Wisconsin, or provides any intrastate
service. The answer is therefore no. No certificate is required under Wisconsin law, and even if
Wisconsin law purported to require such a certification (which it does not), any state requirement
has been preempted by federal law under the doctrines of express, field and conflict preemption.
Halo is operating as a CMRS carrier in Wisconsin. Pursuant to Wis. Stat.
196.01(5)(b)(4), a CMRS carrier is not a "public utility" in Wisconsin and no certification is
required.
The only way that certification could be required of either Transcom or Halo is if the
Commission were to rule that neither Transcom nor Halo has the right to rely on Transcom's
"See California v. FCC, 905 F.2d 1217, 1240 (9th Cir. 1990) [rejecting FCC's initial attempt to preempt stateregulation of common carrier provided intrastate enhanced services but affirming preemption as to "non-commoncarriers such as IBM"]; Memorandum Opinion and Order, In the Matter of Petition for Declaratory Ruling thatpulver. corn's Free 8'orld Dialup is Neither Telecommunications Nor a Telecommunications Service, WC DocketNo. 03-45, FCC 04-27, $ 13, 19 FCC Rcd 3307 (rel. Feb. 2004); Vonage Holdings Corp. v. Minnesota PublicUtilities Commission, 290 F. Supp. 2d 993 (D. Minn, 2003).
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING Page 241053969
ESP rulings. That is what the LECs are asking the Commission to do. Halo and Transcom
respectfully suggest the Commission should decline their invitation.
S. What remedial actions, if any, should be ordered by the Commission in light ofits findings or determinations with respect to Issue Nos. 1-7 above? Possibleactions may include, but are not limited to, the following:
~ Rescission or enforcement of the Commission's approval of the AT&T-Halointerconnection agreement under Wis. Stat. g 196.04 and 47 U.S.C. g 251and 252.
~ Injunction against Halo and/or Transcom operations that violate stateprovider certification requirements.
~ Order under Wis. Stat. g 196.219(3)(m) to incumbent providers to terminateservices or connections that facilitate the unauthorized provisioning ofservices.
~ Any other injunctive order respecting the propriety of the services providedby Halo and/or Transcom.
Based on the analysis set forth above, both Halo and Transcom respectfully argue that
any remedial actions ordered by the Commission would be improper and unlawful. Halo and
Transcom also reserve the right to further respond on this issue after any LEC proposes or seeks
any specific relief.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
Page 25
Respectfully submitted,
/s/ Steven H. Thomas 12/02/11
NILES BERMANWisconsin State Bar No. 10170S2WHEELER, VAN SICKLE c%
ANDERSON, S.C.25 West Main Street, Suite 801Madison, WI 53703Phone: 608.255.7277Fax: 608.255.6006
STEVEN H. THOMASTexas State Bar No. 19868890TROY P. MAJOUETexas State Bar No. 2406773SJENNIFER M. LARSONTexas State Bar No. 24071167McGUIRE, CRADDOCKdk STROTHER, P.C.2501 N. Harwood, Suite 1800Dallas, TX 75201Phone: 214.954.6800Fax: 214.954.6850
W. SCOTT MCCOLLOUGHTexas State Bar No. 13434100Federal Bar No. 53446MCCOLLOUGHi HENRY PC1250 S. Capital of Texas Hwy. , Bldg. 2-235West Lake Hills, TX 78746Phone: 512.888.1112Fax: 512.692.2522
Attorneys for Halo 8'ireless, Inc.and Transcorn Enhanced Services, Inc.
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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VERIFICATION OF HALO WIRELFSS INC.
My name is Russell Wiseman. I am President of Halo Wireless, Inc, {"Halo"). My
business address is 2351 West Northwest Highway, Suite 1204, Dallas, Texas 75220. I am
familiar with the business records of Halo. Further, to the best of the company's knowledge, the
information provided herein is true and correct.
Russell WisemanPresident, Halo Wireless, Inc.
SUBSCRIBED and SWORN to before me by Russell Wiseman, this 2- day ofDecember, 2011.
igg))1llllliii)ii
~i~ii%400
iiiillllNQO
0 ARY PUBLIC, STAT 0 TEXAS
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDINGI053969
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VERIFICATION OF TRANSCOM ENHANCED SERVICES INC.
My name is Jeff Miller. I am Chief Financial Officer of Transcom Enhanced Services,
Inc. ("Transcom"). My business address is 307 West 7th Street, Suite 1600, Fort Worth, Texas
76102. I am familiar with the business records of Transcom. Further, to the best of the
company's knowledge, the information provided herein is true and correct.
J Mi erief Fmancial Officer, Transcom Enhanced Services, Inc
2011.SUBSCRIBED aod SWORN to before me by Jeff Miller, this~day of December,
SHSLA ORNAMY COMMISSION EXPIRES
FebruBfy2r, 20t3
NOTARY PUBLIC, STATE OF TEXAS
HALO WIRELESS INC. AND TRANSCOM ENHANCED SERVICES INC. 'SANSWERS ON ISSUES 1-8 IN THE NOTICE OF PROCEEDING1053969
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IN THE UNITED STATES BANKRUPTCY COURTFOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
In Re:
HALO WIRELESS, INC. ,
Debtor.
) Case No. 11-42464)
)
) Sherman, Texas) September 19, 2011)
)
) SECTION 341 MEETING OF) CREDITORS)
)
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TRANSCRIPT OF PROCEEDINGS CONDUCTEDBY THE UNITED STATES TRUSTEE
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ATTENDEES:
For the U. S. Trustee: John M. VardemanOFFICE OF THE UNITED STATES
TRUSTEE110 N. College Street, Suite 300Tyler, TX 75702(903) 590-1450 x218
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For the Debtor: E. Paul KeifferKim E. MosesWRIGHT GINSBERG BRUSILOWRepublic Center, Suite 4150325 N. St. Paul StreetDallas, TX 75201(214) 651—6517
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For Texas and MissouriTelephone Companies:
For TDS Telecom:
Brook B. BrownMCGINNIS, LOCHRIDGE & KILGORE,
LLP600 Congress Avenue, Ste. 2100Austin, TX 78701(512) 495-6000
Cassandra A. SepanikDavid M. BennettTHOMPSON & KNIGHT, LLPOne Arts Plaza1722 Routh Street, Suite 1500Dallas, TX 75201
(214) 969-1700
For AT&T: Toby L. GerberFULBRIGHT & JAWORSKI, LLP2200 Ross Avenue, Suite 2800Dallas, TX 75201-2784(214) 855-8000
Transcription Service: Kathy Rehling209 Bay CircleCoppell, TX 75019(972) 304-1998
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25Proceedings recorded by electronic sound recording;
transcript produced by transcription service.
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SHERMAN, TEXAS — SEPTEMBER 19, 2011
MR. VARDEMAN: This is the meeting of creditors in
Bankruptcy Case No. 11-42464, Halo Wireless, Inc. That's the
name of the debtor. The Debtor's attorney is Mr. Paul
Keiffer, and also Ms. Kim Moses. Both of those are present
today. The Debtor's representatives are Russell Wiseman and
Jeff Miller. I have checked their driver's licenses, for the
record.
Mr. Wiseman and Mr. Miller, my name is John Vardeman.
I'm an attorney with the U. S. Trustee's Office. I need to
swear you in and ask you some questions. Please raise your
right hand as I swear you in, and please answer all of my
questions out loud. We are recording this.
14 (Mr. Wiseman and Mr. Miller are sworn. )
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MR. VARDEMAN: And Mr. Wiseman, what is your
capacity with the Debtor?
MR. WISEMAN: President and Chief Operating Officer.
MR. VARDEMAN: And Mr. Miller?
MR. MILLER: Chief Financial Officer.
MR. VARDEMAN: Okay. Did you help Mr. Keiffer and
Ms. Moses in the preparation of the bankruptcy petition, the
schedules, and the Statement of Financial Affairs filed in
this case?
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MR. WISEMAN: Yes.
MR. MILLER: Yes.
MR. VARDEMAN: Is all of the information contained
in the bankruptcy filing true and correct?
MR. WISEMAN: Yes, to our knowledge.
MR. MILLER: Yes.
MR. VARDEMAN: Did you list all of the Debtor' s
assets?
MR. WISEMAN: Yes.
MR. MILLER: Yes.
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MR. VARDEMAN: Did you list all of the Debtor' s
liabilities?
MR. WISEMAN: Yes.
MR. MILLER: Yes.
MR. VARDEMAN: Is there anything in the bankruptcy
filing that needs to be changed or corrected at this point?
MR. WISEMAN: No.
MR. MILLER: No.
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MR. VARDEMAN: Okay. Mr. Keiffer, as I understand,
the Debtor was provided approximately $50, 000 as a retainer
in this case. Is that correct?
MR. KEIFFER: Correct. Of which $42, 000 was filed
with the -- as the actual retainer. The $8, 000 was pre
earned prepetition.
MR. VARDEMAN: All right. And there is an
application to employ on file. Is that correct?
MR. KEIFFER: Already granted.
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MR. VARDEMAN: Are there going to be any other
professionals hired in this case?
MR. KEIFFER: There are already two professionals
employed by the Court. There are two that remain at issue.
MR. VARDEMAN: These are special counsel?
MR. KEIFFER: Correct.
MR. VARDEMAN: Any CPAs or Realtors or anything,
MR. KEIFFER: No.
MR. VARDEMAN: -- valuation experts?
MR. KEIFFER: Not at this juncture.
MR. VARDEMAN: All right. Where is the debtor in
possession account located?
MR. MILLER: Wells Fargo.
MR. VARDEMAN: Are there any other accounts stillopen that the Debtor has an interest in?
MR. MILLER: No, sir.MR. VARDEMAN: How much money does the Debtor have?
Everything?
MR. KEIFFER: Today, or on the date of
MR. VARDEMAN: Today. Approximately.
MR. MILLER: I don't know that. I mean,
MR. VARDEMAN: Mr. Wiseman, do you know?
MR. WISEMAN: I do not know, no.
MR. VARDEMAN: Okay. How would you find out?
MR. MILLER: I'd just call. I mean, I know at the
end of August there was roughly $300, 000 in the account.
MR. GERBER: Could you speak up a bit?
MR. MILLER: Sure.
MR. GERBER: And say it again?
MR. MILLER: Sure. At the end of August, there was
roughly $300, 000 on the books.
MR. VARDEMAN: Is there a cash collateral issue in
this case?
MR. KEIFFER: No.
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MR. VARDEMAN: The case was filed on August the 8th.
I believe, then, the monthly operating report would be firstdue tomorrow, on September the 20th, and every 20th of the
month thereafter.
MR. KEIFFER: Correct. And working on it now.
People are working on it now. We should get our first draft
this afternoon.
MR. VARDEMAN: Are you operating a business?
MR. MILLER: Yes.
MR. VARDEMAN: Okay. How many employees
MR. KEIFFER: Try to be a little more forceful in
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MR. VARDEMAN: Yeah. We are recording it.MR. MILLER: I'm sorry. Okay.
MR. VARDEMAN: How many employees?
MR. MILLER: Two employees, and 15 -- 15
MR. WISEMAN: Contractor/consultants included, or
just employees?
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MR. VARDEMAN: Just employees.
MR. MILLER: Two.
MR. VARDEMAN: Are you the two employees?
MR. WISEMAN: No. Well, he is.MR. MILLER: I am a
MR. VARDEMAN: Okay. And who's the other employee?
MR. MILLER: Carolyn Malone.
MR. VARDEMAN: All right. Are your wages current
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since the date of the bankruptcy?
MR. MILLER: Yes.
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MR. VARDEMAN: Tax withholding?
MR. MILLER: Yes.
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MR. VARDEMAN: All the bills that have come due
since the date of the bankruptcy, are those current?
MR. MILLER: Yes. All right. Can you
MR. KEIFFER: We usually say all the bills that have
accrued postpetition and are due currently, we have. There
may have been other bills that have come due, but the split,we' ve -- we' ll take the pre and post and take care of that.
MR. VARDEMAN: Is it the same answer?
MR. MILLER: Yes.
MR. VARDEMAN: Okay. Are there any officers that
are being compensated? Are you being compensated?
MR. MILLER: Yes.
MR. VARDEMAN: All right. And how much are you
compensated, Mr. Miller?
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MR. MILLER: $500 a month.
MR. VARDEMAN: Is that it?MR. MILLER: Yes.
MR. VARDEMAN: Mr. Wiseman?
MR. WISEMAN: Yes, sir?
MR. VARDEMAN: Are you being compensated?
MR. WISEMAN: Yes.
MR. VARDEMAN: How much?
MR. WISEMAN: As -- I'm not an employee.
MR. VARDEMAN: As an officer?
MR. WISEMAN: My annual compensation through my
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MR. VARDEMAN: Who is your employer?
MR. WISEMAN: Source Communications of America.
MR. VARDEMAN: All right. Do you receive any
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MR. KEIFFER: Directly' ?
MR. WISEMAN: Directly? No.
MR. VARDEMAN: Okay. Any other officers that
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MR. MILLER: Carolyn Malone.
MR. KEIFFER: Is she an officer or an employee?
MR. MILLER: She's an officer and an employee.
MR. KEIFFER: All right.
MR. VARDEMAN: How much does she get?
MR. MILLER: $500 a month.
MR. VARDEMAN: Where do you carry your casualty and
6 liability insurance?
MR. MILLER: I'd have to look it up.
MR. KEIFFER: I don'0 know that there's a statement
9 on it. Do you recall, Kim? Do we pay any -- we sent the
10 data to them.
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MR. VARDEMAN: You' ve provided that to our office'?
MR. KEIFFER: Yes. We provided that
MR. VARDEMAN: Okay. Then I' ll waive that question
14 for the time being until we have a chance to look at that.
15 Okay. Franchises and licenses: Are there franchises and
16 licenses that the Debtor has?
17 MR. WISEMAN: Would you consider the radio station
18 authorization from the FCC a license?
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MR. VARDEMAN: I would.
MR. KEIFFER: Yes.
MR. WISEMAN: Off the top of my head, that's the
22 only one I can think of.
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MR. VARDEMAN: FCC license? Is there just one?
MR. WISEMAN: Yes.
MR. VARDEMAN: Are you current with your obligations
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on that?
MR. WISEMAN: There are no obligations on it.MR. KEIFFER: We do have another license listed on
Schedule B-23 as Ameliowave software license.
MR. VARDEMAN: Okay.
MR. KEIFFER: But that's -- I don't know if -- you
know, that depends upon whether you consider your Microsoft
operating system license as a license.
MR. VARDEMAN: Okay. All right.
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MR. MILLER: Right. It's just a software license.
MR. VARDEMAN: Right. Mr. Keiffer, very briefly,
tell me how we got here and where we' re going. I think
everybody knows, though.
MR. KEIFFER: Everybody knows and everybody has
their opinions on whether they agree with how I put it or
not. But the Debtor was facing or involved in at least 20
actions in 10 different states, in either public utilities
commissions, public service commissions, state district or
U. S. district courts, some of which the Debtor brought
themselves but most of which they had not, the vast majority
they had not.
Regarding the nature of the Debtor's operations, that 20
and, again, continued to increase; it was moving up in
time -- litigation sequence was crippling to the Debtor' s
prospects. The Debtor could not continue, did not have the
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There may be interim decisions that may make one thing happen
and you have to operate under that, but there' ll be appellate
rights. This matter will not, I suspect, when the firstjudge makes the first statement about -- at the first battle,
that that will be the end of it. I suspect we' ll be going up
as far as these -- as circumstances will allow us.
MR. VARDEMAN: Okay. All right. I understand.
Okay. How many creditor groups do we have represented
here? If you' ll please raise your hand. Okay. I see four
hands. Okay. What I' ll do is I' ll divide your time up ten
minutes at a time and we' ll go that way and see where we get
from at that point.
I think we all sat in on the hearing the other day. I
know what the issues are in this case. Please understand
that the scope of the 341 is basically to find out about the
Debtor's assets, liabilities, income and expenses, and their
schedules. So let's please limit the questions to those
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19 It's always ladies first. Ma' am, you' re first. Your
20 name and who do you represent?
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MS. BROWN: Brook Brown.
MR. VARDEMAN: Okay.
MS. BROWN: And I represent the Texas and Missouri
24 Telephone Companies.
25 MR. VARDEMAN: Do you have questions for the Debtor?
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MS. BROWN: Yes, I do. Pull up a chair?
MR. VARDEMAN: You may. That would be the easiest
thing to do.
MS. BROWN: Thank you.
MR. VARDEMAN: Okay. Go ahead.
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MS. BROWN: Thank you. Mr. Wiseman and Mr. Miller,
could you turn to Schedule B? And ran you tell me: Are the
base stations with which Halo connects with Transcom, are
they shown on this Schedule B?
MR. WISEMAN: The base stations that Halo connects
to Transcom with? The Halo base stations are leased through
a company called SAT Net. So the leasing arrangements are
included in the schedules, but the assets themselves are
owned by a company called SAT Net.
MR. KEIFFER: The SAT Net reference is in Schedule
G. And there is a reference at that point in Schedule G that
there's an issue of whether it is or isn't a lease. We
reserve that point.
MS. BROWN: Okay. What is the annual amount of that
lease?
MR. MILLER: Well, the current payment terms are
$165, 000 a month for 12 months.
MR. KEIFFER: It would be about $1, 900, 000 to $2
million?
25 MR. MILLER: Right. The current
15
MR. KEIFFER: For an annual.
MR. MILLER: The current obligation
MS. BROWN: A month for nine months, did you say?
I'm sorry.
MR. MILLER: Twelve. Twelve months.
MS. BROWN: For 12 months? And when was that
that contract was entered into June 1 of 2010?
MR. MILLER: If that's what it says here, that' s
correct.
10 MS. BROWN: Okay. And SAT Net is also an affiliateof the Debtor?
12 MR. KEIFFER: Under bankruptcy definitions, we
13 believe that to be the case.
14 MS. BROWN: Okay. Mr. Miller, are you president of
15 SAT Net?
16
17
18
19
MR. MILLER: I am.
MS. BROWN: Are you an employee of SAT Net?
MR. MILLER: I am.
MS. BROWN: And Ms. Malone is Secretary/Treasurer of
20 SAT Net?
21
22
MR. MILLER: She is.MS. BROWN: Are there any other common directors or
23 owners or investors between SAT Net and Halo?
24
25
MR. MILLER: There are.
MS. BROWN: Who are they, please?
16
MR. MILLER: Gary Shapiro, Tim Terrell and Scott
2 Birdwell.
MS. BROWN: And where are these base stations
4 located? What is the physical address?
MR. MILLER: There's a schedule in the documents
6 that lists the exact address.
MS. BROWN: Could you identify that for me, please?
MR. MILLER: Okay. Exhibit G-1 is the -- is 27 of
9 the 28 tower site addresses. There is one additional site in
10 Enid, Oklahoma. I don't know that we have the address listed
11 here, but if you need the address I can provide it.12 MS. BROWN: So is it your -- are you saying that
13 there is a Halo-owned or operated base station at each of the
14 addresses listed on Exhibit G-1?
15 MR. MILLER: Halo has tower leases in each of those
16 locations
17
18
MS. BROWN: That's not my question.
MR. MILLER: -- from which it operates the base
19 stations which are leased from SAT Net.
20 MS. BROWN: Let me ask my question again. Are the
21 base stations that Halo uses to connect with Transcom, are
22 those base stations physically located at the addresses
23 listed on G-1?
24
25
MR. MILLER: Yes.
MS. BROWN: And I believe that those tower leases
17
are also leases, right, not Halo assets?
MR. MILLER: Those are leases. And--
NR. KEIFFER: I don't know if I'm going to
characterize the leases as being assets are not, but
nonetheless they are leases.
MS. BROWN: They' re not physical property owned by
the towers are not owned by Halo?
10
MR. MILLER: That's correct.
MS. BROWN: They' re leased?
MR. WISEMAN: Space on the towers are leased. The
towers themselves.
12 MS. BROWN: And who are they leased by? Are they
13 leased in Halo's name? Does Halo hold the lease?
14
15
16
MR. MILLER: Yes.
MS. BROWN: And who is the lessor?
MR. MILLER: American Tower in 27 of the locations,
17 and SBA Communications in one of them.
18
19
MS. BROWN: And who is the second? I'm sorry.
MR. MILLER: SBA Communications. That's the one in
20 Enid, Oklahoma.
21
22
23
25
MR. KEIFFER: That's the one we need to add.
MS. MOSES: No, it's listed.
MR. WISEMAN: It's listed?
MR. KEIFFER: In G.
MS. MOSES: It's just listed separately.
63
10
12
13
14
15
16
17
18
19
20
21
22
23
24
MR. KEIFFER: Yeah. Rural telephonic service. It' s
been out there forever.
MR. WISEMAN: It's a fee that any common carrier has
to pay to subsidize rural services across the -- every
carrier pays it.MR. KEIFFER: Every carrier. Any phone bill you' ll
get, you' ll see one.
MR. WISEMAN: It's not an optional thing.
MS. SEPANIK: So there's no contract?
MR. KEIFFER: Correct.
MR. WISEMAN: No.
MR. KEIFFER: I think it's statutory.
MR. WISEMAN: We report our
MS. SEPANIK: It's statutory?
MR. WISEMAN: We report our revenues and they--it's like any other tax obligation. There's schedules based
on your revenues. You pay the fees.
MR. KEIFFER: That's why it's on Schedule E, because
it. 's a statutory obligation.
MS. SEPANIK: Right. Yeah.
MR. KEIFFER: An excise tax
MS. SEPANIK: Uh —huh.
MR. KEIFFER: -- is what it's been characterized to
be similar to.25 MS. SEPANIK: Uh-hL1h.
64
10
12
MR. BENNETT: And is 100 percent of that thought to
be priority?
MR. KEIFFER: There's -- yeah. I don't think
there's any subdivision, David, for them that they' ve got to
do part of it's priority, and what's not. I think it's just
like, everything Uncle Sam has, it's all priority.
MR. WISEMAN: Yeah.
MR. KEIFFER: Okay.
MR. VARDEMAN: A couple of more questions.
MS. SEPANIK: That's it.MR. VARDEMAN: Okay. Mr. Gerber, do you have any
other questions?
13 MR. GERBER: If you don't mind, sir.14 Mr. Wiseman, who do you report to in your capacity as an
15 officer of the Debtor?
16 MR. WISEMAN: I report to a management committee of
17 the investor-owners
18
19
20
21
22
23
24
25
MR. GERBER: Okay. And who is -- who sits on that
management committee?
MR. WISEMAN: It's Scott Birdwell, Jake Miller,
Carolyn Malone. Occasionally the major investors have
participated in that.
MR. GERBER: And who are those -- would you just
name those major investors?
MR. WISEMAN: Tim Terrell and Gary Shapiro.
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Page 2 of 55
MFN AGREEMENT
WIRELESS ADOPTION AGREEMENT/AT&T-9STATE
PAGE 1 OF 4HALO WIRLELESS
VERSION —03/25/1 0
This MFN Agreement ("MFN Agreement" ), which shall be filed with and is subject to approval by the respective StateCommissions, as indicated below, and shall become effective ten (10) days after approval by such Commissions ("EffectiveDate" ), is entered into by and between Halo Wireless, Inc. ("CARRIER" ), a Texas corporation on behalf of itself, and BellSouthTelecommunications, Inc. , d/b/a ATBT Alabama, ATLT Florida, AT&T Georgia, ATBT Kentucky, ATLT Louisiana, ATLTMississippi, ATLT North Carolina, ATLT South Carolina and ATB T Tennessee, (collectively, "ATBT"), having an office at 675W. Peachtree Street, Atlanta, Georgia, 30375, on behalf of itself and its successors and assigns.
WHEREAS, the Telecommunications Act of 1996 (the "Act") was signed into law on February 8, 1996;
WHEREAS, CARRIER has requested that ATB T make available the 251/252 wireless interconnection agreement, in
its entirety, executed between BellSouth Telecommunications, Inc. and T-Mobile USA, Inc. , dated May 8, 2003, for the
State(s) of Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee (collectively"ATBT") ("Wireless Agreement" );
WHEREAS, pursuant to Section 252(i) of the Act, for purposes of this MFN Agreement, CARRIER has adopted theWireless Agreement for the State(s) of Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and
Tennessee; and,
WHEREAS, the Parties have agreed to add an additional Whereas Clause to the Wireless Agreement, through aseparate amendment to the Wireless Agreement, which the Parties are executing concurrent with CARRIER'S execution ofthis MFN Agreement;
NOW, THEREFORE, in consideration of the promises and mutual covenants of this MFN Agreement, CARRIER and
ATLT hereby agree as follows:
1. ATBT shall be defined as the States of Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina,
South Carolina and Tennessee.
2. CARRIER and AT&T shall adopt, in its entirety, the Wireless Agreement, dated May 8, 2003, and any and all
amendments to said Wireless Agreement, executed and approved by the appropriate State Commissions as of the date of theexecution of this MFN Agreement. The Wireless Agreement and all amendments thereto are attached hereto as Exhibit 1 and
are incorporated herein by this reference. The adoption of the Wireless Agreement with amendment(s) consists of the
following:
ITEM
MFN A reement
Si nature Pa eExhibit1 Cover Pa eT-Mobile USA, Inc. A reement
T-Mobile USA, Inc. Amendment —Effective March 3, 2004T-Mobile USA, Inc. Amendment —Effective A ril 30, 2006T-Mobile USA, Inc, Amendment —Effective A ril 21, 2008T-Mobile USA, Inc, Amendment —Effective December 15, 2008
Whereas Clause Amendment
3. In the event that CARRIER consists of two (2) or more separate entities as set forth in the preamble to this MFN
Agreement, all such entities shall be jointly and severally liable for the obligations of CARRIER under this MFN Agreement,
The term of this MFN Agreement shall be from the Effective Date as set forth in the first paragraph above and shall expire asof January 7, 2011.
Page 2 of 58
Page 3 of 55
WIRELESS ADOPTION AGREEMENT/AT&T-9STATE
PAGE 2 OF 4HALO WIRLELESS
VERSION —03/25/1 0
4. CARRIER shall accept and incorporate any approved amendments to the Wireless Agreement executed as a resultof any final judicial, regulatory, or legislative action.
5. ln entering into this MFN Agreement, the Parties acknowledge and agree that neither Party waives, and each Partyexpressly reserves, any of its rights, remedies or arguments it may have at law or under the intervening law or regulatorychange provisions in this MFN Agreement with respect to any orders, decisions, legislation or proceedings and any remandsby the FCC, State Commission, court, legislature or other governmental body including, without limitation, any such orders,decisions, legislation, proceedings, and remands which were issued, released or became effective prior to the Effective Dateof this MFN Agreement, or which the Parties have not yet fully incorporated into this Agreement or which may be the subjectof further government review.
6,7. Every notice, consent or approval of a legal nature, required or permitted by this MFN Agreement shall be in writingand shall be delivered either by hand, by overnight courier or by US mail postage prepaid addressed to:
To AT&T:
Contract Management
ATTN: Notices Manager
311 S.Akard, 9'" Floor
Dallas, TX 75202-5398Facsimile Number: 214-464-2006
With a Copy To:
Business Markets Attorney
Suite 4300675 W. Peachtree St.Atlanta, GA 30375
To CARRIER:
Todd Wallace
CTO
3437 W. 7'" StreetBox 127Fort Worth, TX 76107Phone Number 682-551-3797Facsimile Number 817-338-3777Email: twallace@halowireless. corn
or at such other address as the intended recipient previously shall have designated by written notice to the other Party.Where specifically required, notices shall be by certified or registered mail. Unless otherwise provided in this MFN
Agreement, notice by mail shall be effective on the date it is officially recorded as delivered by return receipt or equivalent, and
in the absence of such record of delivery, it shall be presumed to have been delivered the fifth day, or next business day after
the fifth day, after it was deposited in the mails,
Page 3 of 58
Page 4 of 55 WIRELESS ADOPTION AGREEMENT/ATST-9STATE
PAGE30F 4HALO WIRLELESS
VERSION - 03/25/10
Halo Wireless, inc. BelISouth Telecommunications, inc. , dlb/aAT&T Alabama, AT&T Florida, AT&T Georgia,AT8T Kentucky, AT&T Mississippi, AT&TNorth Carolina, AT&7 South Carolina andATST Tennessee, by AT&7 Operations, inc.,their authorized agent
By:
(gpss~ lp~ ~p
By:
Name: Eddie A. Reed, Jr.
Title:
Date:
Title: Director-Interconnection Agreements
Date: 0 X-fo
Page 4 of 58
Page 5 of 55
WIRELESS ADOPTION AGREEMENT/AT&T-9STATE
PAGE40F4HALOWIRLELESS
VERSION —03/25/1 0
EXHIBIT I
Page 5 of 58
Page 6 of 55
By and Between
BellSouth Telecommunications, Inc.
And
T-Mobile USA, Inc. f/k/a VoiceStream WirelessCorporation
Page 6 of 58
Page 7 of 55 CMRS0043
INTERCONNECTION
AGREEMENT
BETWEEN
BELLSOUTH TELECOMMUNICATIONS, INC.
ANO
T-Mobile USA, Inc.
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TABLE OF CONTENTS
SectionI.II.
III.
IV.
Y.Vl.VII.Vill.IX.X.XI.XII.XIII.XIV.XV.XVI.XVII.XVIII.XIX.XX.XXI~
XXII.XXIII.XXIV.XXV.XXVI.XXVII.XXVIII.XXIX.XXX.XXXI.XXXII.XXXIII.XXXIV.XXXV.XXXVI.XX)Ofll.
of Way
rmation
DefinitionsPurposeTerm of the AgreementMethods of InterconnectionInterconnection Trunk Group OptionsCompensation and BillingNon-Local Traffic InterconnectionMeet Point BillingAccess to Poles, Ducts, Conduits, and RightsAccess to 911/E911 Emergency NetworkAccess to Telephone NumbersLocal Number PortabilityAccess to Signaling and Signaling DatabasesNetwork Design and ManagementAuditing ProceduresLiability and IndemnificationModification of AgreementTaxes and FeesTreatment of Proprietary and Confidential InfoResolution of DisputesWaiversAssignmentAmendmentSeverabilitySurvivalGoverning LawArm's Length NegotiationsFiling of AgreementNoticesHeadings of No Force or EffectMultiple CounterpartsEntire AgreementNo Joint VentureRemedies CumulativeNo Third Party BeneficiariesReferences to Other DocumentsMiscellaneous
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Page 9 of 55 CMRS0043
Attachments:AB'I
B2
AffiliatesLocal CMRS Interconnections RatesLocal CMRS Interconnections Rates (if applicable)
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Page 10 of 55 CMRS0043
AGREEMENT
THIS AGREEMENT is made by and between BellSouth Telecommunications,Inc. , ("BellSouth"), a Georgia Corporation, and T-Mobile USA, Inc. fik/a VoiceStreamWireless Corp. ("Carrier" ) a Delaware Corporation for and on behalf of those entitieslisted in Attachment A which entities T-Mobile USA, Inc. hereby represents it hasauthority to bind hereunder (all collectively referred to as "Carrier" ) and shall bedeemed effective as of May 1, 2003, (the "Effective Date" ). This Agreement may referto either BellSouth or Carrier or both as a "party" or "parties. '*
WITNESSETH
WHEREAS, BellSouth is an incumbent local exchange carrier authorized toprovide telecommunications services in the states of Alabama, Florida, Georgia,Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee; and
VVHEREAS, Carrier is a Commercial Mobile Radio Service ("CMRS") providerlicensed by the Federal Communications Commission ("FCC") to provide CMRS in theStates of Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina,South Carolina and Tennessee; and
WHEREAS, the parties wish to interconnect their facilities and exchange trafficfor the purposes of fulfilling their obligations pursuant to sections 251, 252 and 271 ofthe Telecommunications Act of 1996 and to replace any and all other prior agreements,both written and oral;
NOW THEREFORE, in consideration of the mutual agreements containedherein, BelISouth and Carrier agree as follows:
Definitions
For purposes of this Agreement, the following capitalized terms have the meanings setforth below unless the context requires otherwise. Terms that appear herein (whetheror not capitalized) that are not defined herein have the meanings ascribed to them in
the Act (defined herein), or (if not defined therein) have the meanings customarilyassociated with them based on ordinary usage in the telecommunications industry as ofthe Effective Date.
A. Affiliate is defined as a person that (directly or indirectly) owns orcontrols, is owned or controlled by, or is under common ownership or controlwith, another person. For purposes of this paragraph, the term "own" means toown an equity interest (or equivalent thereof) of more than 10 percent.
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Page 11 of 55 CMRS0043
B. Commission is defined as the appropriate regulatory agency in each ofBellSouth's nine state region: Alabama, Florida, Georgia, Kentucky, Louisiana,Mississippi, North Carolina, South Carolina, and Tennessee.
C. Intermediary Traffic is defined as the delivery, pursuant to thisagreement or Commission directive, of local or toll (using traditional landlinedefinitions) traffic to or from (i) a local exchange carrier other than BellSouth; (ii)a competitive or alternative local exchange carrier ("CLEC"); or (iii) anothertelecommunications carrier such as a CMRS provider other than Carrier throughthe respective networks of BellSouth or Carrier, and delivered from or to an enduser of BellSouth or Carrier. All local or toll traffic from a local exchange carrierdelivered to Carrier not originated on the BellSouth network by BellSouth isconsidered Intermediary Traffic.
D. Local Traffic is defined for purposes of reciprocal compensation underthis Agreement as: (1) any telephone call that originates on the network ofCarrier within a Major Trading Area ("MTA") and terminates on the network ofBellSouth in the same MTA and within the Local Access and Transport Area("LATA") in which the call is handed off from Carrier to BellSouth, and (2) anytelephone call that originates on the network of BellSouth that is handed off toCarrier in BellSouth's service territory and in the same LATA in which the calloriginates and terminates and is delivered to the network of Carrier in the MTAin which the call is handed off from BellSouth to Carrier. For purposes of thisAgreement, LATA shall have the same definition as that contained in theTelecommunications Act of 1996, and MTA shall have the same definition asthat contained in the FCC's rules. Traffic delivered to or received from aninterexchange carrier is not Local Traffic. Interexchange access as defined in
4? CFR Part 69 and in comparable state utility laws ("Access Traffic" ) is notLocal Traffic.
E. Local Interconnection is defined for purposes of this Agreement as theconnection of the parties' respective networks for the exchange anddelivery of Local Traffic to be terminated on each party's local network so that
end users of either party have the ability to reach end users of the other partywithout the use of any access code or substantial delay in the processing of thecall.
F. Non-Local Traffic is defined as all traffic that is neither Local Traffic norAccess Traffic, as described in section Vll of this Agreement.
G. Percent of Interstate Usage (PIU) is defined as a factor to be applied tothat portion of Non-Local Traffic comprised of interstate interMTA minutes of usein order to designate those minutes that should be rated as interstate accessservices minutes of use. The numerator is all interstate interMTA minutes of
Ver. 5/6/02a
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use, less any interstate minutes of use for "Terminating Party Pays" services,such as 800 Services. The denominator is all interMTA minutes of use less allminutes attributable to Terminating Party Pays services.
H. Percent Local Usage (PLU) is defined as a factor to be applied toterminating minutes of use. The numerator is all "nonintermediary" Localminutes of use. The denominator is the total minutes of use including Local andNon-Local.
I. Point of Interconnection (POI) is defined as the physical geographiclocation(s), within BellSouth's service area within a LATA, at which the Partiesinterconnect their facilities for the origination and/or termination of traffic. Thispoint establishes the technical interface, the test point(s), and the point(s) foroperational division of responsibility between BellSouth's network and Carrier'snetwork.
J. Telecommunications Act of 1996 ("Act") means Public Law 104-104 ofthe United States Congress effective February 8, 1996. The Act amended theCommunications Act of 1934 (47, U.S.C. Section 1 et. seq. ).
K. Type 1 Interconnection is a trunk side connection between a BellSouthend office and a Carrier's POI and provides the capability to access all BellSouthend offices within the LATA. Type 1 Interconnection is technically defined in
Telcordia Technical Reference GR-145-CORE, Issue 2 May 1998, as in effectfrom time to time (or any successor thereto).
L. Type 2A Interconnection are one-way or two-way facilities that provide atrunk side connection between a BellSouth tandem switch and a Carrier's POIand provides access to all BellSouth end offices and third party providerssubtending the BellSouth tandem. Type 2A Interconnection is technically definedin Telcordia Technical Reference GR-145-CORE, Issue 2 May 1998, as in effectfrom time to time (or any successor thereto).
M. Type 28 Interconnection are one-way or two-way facilities that provide ahigh usage route between a BellSouth end office and an Carrier's POI andprovides access to all BellSouth NXX codes homed in that specific end officeand is provided in conjunction with Type 2A Interconnection. Type 2BInterconnection is technically defined in Telcordia Technical Reference GR-145-CORE, Issue 2 May 1998, as in effect from time to time {or any successorthereto).
II. Purpose
The parties desire to enter into this Agreement consistent with all applicablefederal, state and local statutes, rules and regulations in effect as of the date of its
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Page 13of 55 CMRS0043
execution including, without limitation, the Act at Sections 251, 252 and 271. Theaccess and interconnection obligations contained herein enable Carrier to provideCMRS in those areas where it is authorized to provide such services within the ninestate region of BellSouth.
Term of the Agreement
A. The term of this Agreement shall be three years, beginning on theEffective Date and shall apply to the BellSouth territory in the state{s) ofAlabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina,South Carolina and Tennessee.
B. The Parties agree that by no earlier than two hundred seventy {270)daysand no later than one hundred and eighty (180) days prior to the expiration ofthis Agreement, they shall commence negotiations for a new agreement to beeffective beginning on the expiration date of this Agreement ("SubsequentAgreement" ).
C. Either party's request under this Section will, for all purposes, be treatedas a request under Section 252 of the Act for negotiation received by anincumbent local exchange carrier and will begin the process of voluntarynegotiations. If, as of the expiration of this Agreement, a Subsequent Agreementhas not been executed by the Parties, this Agreement shall continue in full forceand effect while the Parties are within negotiation/arbitration process outlined inSection 252 of the Telecommunications Act of 1996, as may be amended. If theSection 252 process is concluded or abandoned, then this Agreement shallterminate and BellSouth shall continue to offer services to Carrier pursuant tothe terms, conditions and rates set forth in BellSouth's then current standardinterconnection agreement. In the event that BellSouth's standardinterconnection agreement becomes effective as between the Parties, theParties may continue to negotiate a Subsequent Agreement or arbitrate disputedissues to reach a Subsequent Agreement as set forth in Section III.B above, andthe terms of such Subsequent Agreement shall be effective as of the effectivedate as stated in Subsequent Agreement.
IY. Methods of Interconnection
A. By mutual agreement of the parties, trunk groups arrangements betweenCarrier and BellSouth shall be established using the interconnecting facilitiesmethods of subsection {B) of this section. Each party will use commerciallyreasonable efforts to construct its network, including the interconnectingfacilities, to achieve optimum cost effectiveness and network efficiency.
B. There are three methods of interconnecting facilities: (1) interconnectionvia facilities owned, provisioned and/or provided by either party to the other
Ver. 5/6/02a
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Page 14 of 55 CMRS0043
party"; (2) physical collocation; and (3) virtual collocation where physicalcollocation is not practical for technical reasons or because of space limitations.Type 1, Type 2A and Type 2B interconnection arrangements described inBellSouth's General Subscriber Services Tariff, Section A35, or, in the case ofNorth Carolina, in the North Carolina Connection and Traffic InterchangeAgreement effective June 30, 1994, as amended, may be purchased pursuant tothis Agreement provided, however, that such interconnection arrangements shallbe provided at the rates, terms and conditions set forth in this Agreement. Ratesand charges for both virtual and physical collocation may be provided in aseparate collocation agreement. Rates for virtual collocation will be based onBellSouth's Interstate Access Services Tariff, FCC 01, Section 20 and/orBellSouth's Intrastate Access Services Tariff, Section E20. Rates for physicalcollocation will be negotiated on an individual case basis.
C. The parties will accept and provide any of the preceding methods ofinterconnection. Carrier may establish a POI on BellSouth's network at anytechnically feasible point in accordance with the 47 CFR 51,703(b). Carriermust designate a POI at at least one BellSouth access tandem within everyLATA Carrier desires to serve, or alternatively, Carrier may elect (in addition toor in lieu of access interconnection at BellSouth's access tandem) tointerconnect directly at any BellSouth end office for delivery of traffic to endusers served by that end office. Such interconnecting facilities shall conform, ata minimum, to the telecommunications industry standard of DS-1 pursuant toBellcore Standard No. TR-NWT-00499. Signal transfer point, Signaling System7 ("SS7") connectivity is required at each interconnection point after Carrierimplements SS7 capability within its own network. BellSouth will provide out-of-band signaling using Common Channel Signaling Access Capability wheretechnically and economically feasible, in accordance with the technicalspecifications set forth in the BellSouth Guidelines to Technical Publication, TR-TSV-000905. The parties' respective facilities shall (i) provide the necessaryon-hook, off-hook answer and disconnect supervision (ii) shall hand off callingparty number ID when technically feasible and (iii) shall honor privacy codes andline blocking requests if possible. In the event a party interconnects via thepurchase of facilities and/or services from the other party, it may do so thoughpurchase of services pursuant to the other party's interstate or intrastate tariff,as amended from time to time, or pursuant to a separate agreement between theParties. . In the event that such facilities are used for two-way interconnection,the appropriate recurring charges for such facilities will be shared by the parties
" On some occasions Carrier may choose to purchase facilities from a third party. In all such casescarrier agrees to give BellSouth 45 (forty five) days notice prior to purchase of the facilities, in order topermit BellSouth the option of providing one-way trunking, if, in its sole discretion BellSouth believesone-way trunking to be a preferable option to third party provided facilities. Such notice shall be sentpursuant to Section XXIX. In no event shall BellSouth assess additional interconnection costs or per-portcharges to Carrier or its third-party provider should Carrier purchase facilities from a third party, e.g. thesame charges that BellSouth would charge Carrier should it provide the service.
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based upon percentages equal to the estimated or actual percentage of trafficon such facilities, in accordance with Section VI.B below.
D. Nothing herein shall prevent Carrier from utilizing existing collocationfacilities, purchased from the interexchange tariffs, for local interconnection;provided, however, that unless otherwise agreed to by the parties, if Carrierorders new facilities for interconnection or rearranges any facilities presentlyused for its alternate access business in order to use such facilities for localinterconnection hereunder and a BellSouth charge is applicable thereto,BellSouth shall only charge Carrier the lower of the interstate or intrastatetariffed rate or promotional rate.
E. The parties agree to provide at least a P.01 level of service and to workcooperatively in the placement and/or removal of interconnection facilities. Theparties will establish trunk groups from the interconnecting facilities ofsubsection (A) of this section. Each party will use its best efforts to construct itsnetwork, including the interconnecting facilities, to achieve optimum costeffectiveness and network efficiency.
F. The parties will use an auditable PLU factor as a method for determiningthe amount of traffic exchanged by the parties that is Local or Non-Local. ThePLU factor will be used for traffic delivered by either party for termination on theother party's network.
G. Unless otherwise agreed, when the parties deliver Access Traffic from anInterexchange Carrier ("IXC") to each other, each party will provide its ownaccess services to (and bill at its own rates) the IXC.
H. The ordering and provision of all services purchased from BellSouth byCarrier shall be as set forth in the BellSouth Telecommunications WirelessCustomer Guide as that guide is amended by BellSouth from time to time duringthe term of this Agreement. The ordering and provisioning of facilities or servicesby a party, including, but limited to, installation, testing, maintenance, repair, anddisaster recovery, shall be provided at a level of quality and care at least equalto that which it provides to itself, an affiliate, or, in the case of BellSouth suppliedinterconnection, at least equal to that provided by BellSouth to any othersimilarly situated CMRS provider having interconnection arrangement(s) withBellSouth comparable to the interconnection arrangement(s) provided to Carrierunder this Agreement, unless Carrier and BellSouth specifically negotiate adifferent level of quality or care.
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Interconnection Trunk Group Options
A. One-Way Trunk Group ArrangementIf the Parties mutually agree upon a one-way trunking arrangement,
the following will apply:
BellSouth will provide and bear the cost of all one-way trunk groups toprovide for the delivery of Local Traffic from BellSouth to Carrier's POIwithin BellSouth's service territory and within the LATA, and Carrier will
provide or bear the cost of one-way trunk group(s) for the delivery ofCarrier's originated Local Traffic and for the receipt and delivery ofIntermediary Traffic to each BellSouth access tandem and end office atwhich the parties interconnect. Carrier may supply its owninterconnection facilities or may purchase such facilities (a) fromBellSouth pursuant to a separate agreement or tariff for this purpose, or(b) from any other third-party supplier as provided in Section IV(B).
Two-Way Trunk Group ArrangementIf the Parties mutually agree upon a two-way trunking arrangement,
the following will apply:
BellSouth and Carrier will share the cost of the two-way trunkgroup carrying both Parties traffic proportionally when purchased via thisAgreement or the General Subscriber Services Tariff, Section A35, or, inthe case of North Carolina, in the North Carolina Connection and TrafficInterchange Agreement effective June 30, 1994, as amended from time totime. BellSouth will bear the cost of the two-way trunk group for theproportion of the facility utilized for the delivery of BellSouth originatedLocal traffic to Carrier's POI within BellSouth's service territory and withinthe LATA (calculated based on the number of minutes of traffic identifiedas BellSouth's divided by the total minutes of use on the facility), andCarrier will provide or bear the cost of the two-way trunk group for allother traffic, including Intermediary traffic.
C. Combination Trunk Group ArrangementIf the Parties cannot agree upon a trunk group arrangement or
elect a combination arrangement, BellSouth will provide and bear the costof a one-way trunk group to provide for the delivery of Local Traffic fromBellSouth to Carrier's POls within BellSouth's service territory and withinthe LATA. Carrier will provide or bear the cost of one-way or two-waytrunk group(s), if two-way trunk group(s) are elected by Carrier, for thedelivery of all Carrier's originated traffic, and also the delivery and receiptof Intermediary Traffic.
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Yl. Compensation and Billing
A. Compensation of Local Traffic
Each party will pay the other for terminating its Local Traffic on the other' snetwork at the Local Interconnection rates as set forth in Attachment B-1. Theserates are reciprocal for mobile-to-land and land-to-mobile calls.
1. Local Traffic Measurement
a. If Carrier has recording capability, but recording limitationsthat prohibits Carriers ability to determine the amount of BellSouthoriginated traffic (Local Traffic) terminated to Carrier over two-way multi-use facilities, BellSouth will provide to Carrier, upon Carrier's writtenrequest to the Local Interconnection Service Center (LISC), on aquarterly basis the percent of total terminating traffic to Carrier that wasoriginated by BellSouth. Such percent will be used by Carrier to billBellSouth for the BellSouth Local Traffic for the following quarter.
b. If Carrier has no recording capability and cannot determinethe amount of traffic terminated to Carrier, a mutually agreed uponmethodology for reciprocal billing percentages for local traffic will beused.
2. The exchange of the parties' traffic on BellSouth's interLATA EASroutes shall be considered Local Traffic and compensation for thetermination of such traffic shall be pursuant to the terms of this section.EAS routes are those exchanges within an exchange's Basic LocalCalling Area, as defined in Section A3 of BellSouth's General SubscriberServices Tariff.
B. Compensation of Facilities
1. Where one-way trunking is used, each party will be solelyresponsible for the recurring and non-recurring cost of that facility up tothe designated POI(s) on the terminating party's network.
2. The Parties agree to share proportionately in the recurring costs oftwo-way interconnection facilities.
a. To determine the amount of compensation due to Carrier forinterconnection facilities with two-way trunking for the transport ofLocal Traffic originating on BellSouth's network and terminating onCarrier's network, Carrier will utilize the prior months undisputedLocal Traffic usage billed by BellSouth and Carrier to develop thepercent of BelISouth originated Local Traffic.
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C.
b. BellSouth will bill Carrier for the entire cost of the facility.Carrier will then apply the BellSouth originated percent against theLocal Traffic portion of the two-way interconnection facility chargesbilled by BellSouth to Carrier. Carrier will invoice BellSouth on amonthly basis, this proportionate cost for the facilities utilized byBellSouth.
Billing
1. The charges for Local Interconnection are to be billed monthly andpaid within thirty (30) days ("Due Date" ). Usage charges will be billed inarrears.
2. Each party will pay the other for terminating its Local Traffic on theother's network, the Local Interconnection Rates set forth in AttachmentB-1 or B-2, as applicable. Charges for terminating traffic will be the actualconversation minutes of use (MOUs) measured from receipt of answersupervision to receipt of disconnect supervision, with such timeaccumulated at the end of the billing period and rounded up to the nextwhole minute.
3. The Parties will use an auditable PLU factor as a method fordetermining whether traffic is Local or Non-Local. The PLU factor will beused for traffic delivered by either party for termination on the otherparty's network. The amount that each party shall pay to the other for thedelivery of Local Traffic shall be calculated by multiplying the applicablerate in Attachment B-1 for each type of call by the total minutes of useeach month for each such type of call. The minutes of use or portionthereof for each call, as the case may be, will be accumulated for themonthly billing period and the total of such minutes of use for the entiremonth rounded to the nearest minute. The usage charges will be basedon the rounded total monthly minutes.
4. Billing disputes shall be handled pursuant to the terms of thissection.
a. Each party agrees to notify the other party in writing uponthe discovery of a billing dispute. In the event of a billing dispute,the Parties will endeavor to informally resolve the dispute within
sixty (60) calendar days of the notification date. If the Parties areunable within the 60 day period to reach resolution, then theaggrieved party may pursue dispute resolution in accordance withthe terms of this Agreement.
b. For purposes of this Section, a billing dispute means adispute of (i) a specific amount of money actually billed by eitherparty (ii) minutes of use (iii) facilities billed for (iv) methodologyapplied to calculations (v) delay in sending invoices or (vi) any
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other bona fide disagreement with compensation or an invoice.The dispute must be clearly explained by the disputing party andsupported by written documentation, which clearly shows the basisfor disputing charges. By way of example and not by limitation, abilling dispute will not include the refusal to pay all or part of a billor bills when no written documentation is provided to support thedispute, nor shall a billing dispute include the refusal to pay otherundisputed amounts owed by the billed party until the dispute isresolved. Claims by the billed party for damages of any kind will
not be considered a billing dispute for purposes of this Section.Once the billing dispute is resolved, the disputing party will makeimmediate payment of any of the disputed amount owed to thebilling party or the billing party shall have the right to pursuenormal treatment procedures. Any credits due to the disputingparty, pursuant to the billing dispute, will be applied to thedisputing party's account by the billing party immediately uponresolution of the dispute.
c. Either party may elect to withhold payment of disputedamounts. If a party disputes a charge and does not pay suchcharge by the payment due date, or if a payment or any portion ofa payment is received by either party after the payment due date,or if a payment or any portion of a payment is received in fundswhich are not immediately available to the other party, then a latepayment charge shall be assessed. However, no such latepayment charge shall be owed with respect to any disputed amountresolved in favor of the disputing party. For bills rendered by eitherparty for payment, the late payment charge for both Parties shallbe calculated based on the portion of the payment not received bythe payment due date times the late payment factor set forth in
subsection 5 hereof. The Parties shall assess interest onpreviously assessed late payment charges only in a state where it
has the authority pursuant to its tariffs.
5. Late payment fees, not to exceed 1 1/2% per month (or a lowerpercent as specified by an appropriate state regulatory agency) after thedue date may be assessed, if undisputed charges are not paid, within
thirty (30) days after the Due Date of the monthly bill. All charges underthis Agreement shall be billed within one (1)year from the time the chargewas incurred; previously unbilled charges more than one (1) year old shallnot be billed by either party.
6. De osit Polic . When purchasing new services from BellSouth totalingmore than 10% of the monthly average of the previous three month's chargesor $500,000, whichever is less, in any one month, Carrier will be required tocomplete the BelISouth Credit Profile and provide information regarding
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credit worthiness. Based on the results of the credit analysis, BellSouthreserves the right to secure the account with a suitable form of securitydeposit. Such security deposit shall take the form, at Carrier's option, ofcash, an Irrevocable Letter of Credit ( BelISouth form), Surety Bond(BellSouth form) or some other form of security. Any such security depositshall in no way release Carrier from its obligation to make complete andtimely payments of undisputed amounts of its bill. If Carrier requests topurchase new services, such security may be required by BellSouth ifjustified as provided herein prior to the installation or provision thereof. If, in
the reasonable opinion of BellSouth based on the Creditworthiness Criteriabelow, the creditworthiness of Carrier has so deteriorated after the EffectiveDate, that its ability to timely pay undisputed charges under this Agreement isdemonstrably in question BellSouth reserves the right to request additionalsecurity in the form specified above, at Carrier's option
BellSouth shall base its creditworthiness determination on only the followingcriteria ("Creditworthiness Criteria):
1. Change from Cash flow positive to Cash flow negative (last FYE andmost recent quarter)
2. Change from EBITDA positive to EBITA negative (last FYE and mostrecent quarter)
3. Debt/tangible net worth 2 or better (last FYE and most recent quarter)4. Bond rating changes from investment grade as defined by Moody's (if
public debt is present)5. D8 B Paydex & 70 (1-100)6. D8 B credit risk class =or & 37. Customer falls from compliance with bank (or other loan provider's
debt covenants)8. No more than 2 times slow pay in the last 12 months for undisputedinvoices.
Interest on a security deposit, if provided in cash, shall accrue and be paid in
accordance with the terms in the appropriate BellSouth tariff. Security depositscollected under this Section shall not exceed an amount not to exceed two (2)months' estimated net undisputed charges to Carrier under this Agreement. In
the event Carrier fails to remit to BellSouth any security deposit requestedpursuant to this Section, service to Carrier (following thirty 30 day's writtennotice and opportunity to cure) may be terminated and any security deposits will
be applied to Carrier's account(s), provided in the event of a dispute concerningthe deposit, then the Dispute Resolution section of this Agreement shall applyand Bellsouth shall not terminate service to Carrier during the pendency of thisdispute for the disputed amounts.
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Yll. Non-Local Traffic Interconnection
A. For terminating its Non-Local Traffic on the other Party's network, eachParty will pay either the access charges described in paragraph (B) hereunder orthe Non-Local Intermediary Charges described in paragraph (D) hereunder, asappropriate.
B. For originating and terminating intrastate or interstate interMTA Non-Local Traffic, each Party shall pay the other BellSouth's intrastate or interstate,as appropriate, switched network access service rate elements on a per minuteof use basis, which are set out in BellSouth's Intrastate Access Services Tariff orBelISouth's Interstate Access Services Tariff as those tariffs may be amendedfrom time to time during the term of this Agreement.
C. If Non-Local Traffic originated by Carrier is delivered by BellSouth fortermination to the network of a third party telecommunications carrier that isuniquely identifiable ("Third Party Carrier" ), then BST will bill Carrier and Carriershall pay a $.002 per minute intermediary charge for such Intermediary Traffic inaddition to any charges that BST may be obligated to pay to the Third PartyCarrier (collectively called "Third Party Termination Charges" ). Third PartyTermination Charges may change during the term of this Agreement, and theappropriate rate shall be the rate in effect when the traffic is terminated. TheParties agree the percentage of Non-Local Traffic delivered to BellSouth byCarrier shall be subject to Intermediary Charges and Third Party TerminationCharges. BellSouth shall not deliver Intermediary Traffic to Carrier fortermination to a Third Party Carrier, and therefore, Carrier shall not bill BellSouthany intermediary charges. Intermediary Traffic transiting BellSouth's network toCarrier is not Local Traffic and Carrier shall not bill BellSouth for IntermediaryTraffic transiting BellSouth's network. In addition, Carrier shall not bill BellSouthfor Traffic received by BellSouth from an interexchange carrier for delivery toCarrier.
D. Where technically possible to measure traffic for classifying trafficpercentage's, the Parties shall utilize actual traffic measurements to classifytraffic in each of the categories shown in subsection E. below. BellSouth mayconduct periodic reviews of Carriers' traffic classification percentage's and shallupdate those percentages for the aforementioned traffic accordingly.
E. For Carrier's that have not exchanged traffic under a previous CMRSinterconnection agreement with BellSouth or for traffic categories that are nottechnically feasible to measure, the associated default traffic classificationpercentages set forth in this subsection will be used until such time actual trafficpatterns have been measured:
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Carrier originated traffic to BellSouthLocal Traffic - 60%Non-Local InterMTA InterState Traffic- .5%Non-Local InterMTA intraState Traffic- .5%Non-Local Intermediary Only Traffic- 31.2%Non-Local Intermediary Plus Cost Traffic —7.8%
BellSouth originated traffic to CarrierLocal Traffic —99%Non-Local InterMTA InterState Traffic -.5%Non-Local InterMTA IntraState Traffic -.5%
F. In the event Carrier activates service in a state that was not originallycovered by this Agreement ("New State(s)"), and in which New State(s) no trafficclassification percentages currently exist, BellSouth will apply an average, basedon Carrier's existing traffic classification percentages for the other states in
which Carrier has established actual traffic measurements, to such New State(s)until such time as actual traffic percentages have been measured.
Vill. Meet Point Billing
A. Meet Point Billing (MPB), as supported by Multiple Exchange CarrierAccess Billing (MECAB) guidelines, shall mean the exchange of billing datarelating to jointly provided switched access calls and Intermediary Traffic.MECAB refers to the document prepared by the Billing Committee of theOrdering and Billing Forum (OBF), which functions under the auspices of theCarrier Liaison Committee (CLC) of the Alliance for TelecommunicationsIndustry Solutions (ATIS). The MECAB document, published by Telcordia as
~
Special Report SR-BDS-000983, contains the recommended guidelines for thebilling of Switched Access Traffic and intermediary Traffic provided by two ormore telecommunications carriers. Subject to Carrier providing all necessaryinformation, BellSouth agrees to participate in MPB for Switched Access Traffic{as described in BellSouth's Tariffs) and Intermediary Traffic. In the event aThird Party Carrier continues to charge BellSouih for Carriers' IntermediaryTraffic, Carrier agrees to keep BellSouth whole for such traffic as stipulated in
Section Vll C. above. BellSouth shall pass Electronic Message Interface (EMI)1101 call records to Carrier at no charge. Depending on the delivery medium )
selected by Carrier, appropriate charges for that delivery medium will be applied.Notwithstanding the foregoing, for purposes of MPB, where either or both of theoriginating or terminating carrier of Intermediary Traffic does not have MPBcapability, Section Vll C. will apply. I
B. Information required from Carriers participating in MPB with BellSouthincludes, but is not limited to: (1) Regional Accounting Office code (RAO), (2)Operating Company Number (OCN) per state for each entity to be billed (if an
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QCN is not available for each billed entity, BellSouth will only render a bill toCarrier), (3) a unique Access Carrier Name Abbreviation (ACNA), (4) PercentInterstate Usage, (5) Percent Local Usage, (6) 800 Service Percent InterstateUsage or default of 50%, (7) Billing Interconnection Percentage, (8) a ScreeningTelephone Number (STN) from Carrier's dedicated NXX associated with eachTrunk Group subscribed to. A default Billing interconnection Percentage (BIP) of0% BellSouth and 100% Carrier will be used if Carrier does not file with NECA toestablish a BIP other than default. Carrier must support MPB for all SwitchedAccess Traffic and Intermediary Traffic in accordance with Mechanized MECABguidelines. The Parties acknowledge that the exchange of 1150 records will notbe required.
C. MPB will be provided for Switched Access Traffic and Intermediary Trafficat the access tandem level only. Parties utilizing MPB must subscribe toaccess tandem level interconnections with BellSouth and must deliver allIntermediary Traffic to BellSouth over such access tandem level interconnections.Additionally, exchange of records will necessitate both the originating andterminating networks to subscribe to dedicated NXX codes, which can beidentified as belonging to the originating and terminating network. NPA/NXXcodes are presented in the Local Exchange Routing Guide (LERG) in associationwith a specific switch Common Language Location Identification (CLLI). Undernational programming rules associated with Carrier Access Billing Systems(CABS), each CLLI is associated with a single rate center. Additionally, (i) if theCarrier has Type 2A and Non-Type 2A NPA/NXX codes associated with a singleCLLI or, (ii) if the CLLI is associated with additional NPA/NXX codes with ratecenters outside of BellSouth's service area or, (iii) if the Type 2A NPA/NXX codeor CLLI home on a non-BellSouth SHA "00" tandem or are in a disassociatedLATA, then those NPA/NXX codes and CLLI codes will not be included in MPBand Switched Access Traffic and Intermediary Traffic associated with thoseNPA/NXX codes will continue to be billed in accordance with the provisions ofSection Vll C. When converting to MPB, if Carrier has NPA/NXX codes withmore than a single rate center terminating to a given CLLI, Carrier must provideBellSouth with information stating which BellSouth rate center will be associatedwith the CLLI. MPB is not available when the access tandem at which theParties have interconnected does not have the capability to measure actualtraffic.
O. In a MPB environment, when Carrier utilizes services provided byBellSouth that are necessary to deliver certain types of calls (e.g. Local NumberPortability queries and 800 Data Base queries), Carrier will be billed applicablecharges as set forth in BellSouth's federal or state access tariffs, as appropriate.In ihe alternative, Carrier may perform the appropriate database queries prior todelivery of such traffic to BellSouth.
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E. Participation in MPB is outside the reciprocal compensation requirementsof this Agreement. Under MPB, Carrier will compensate BelISouth at the rateset forth in Section VII.C of this Agreement for Carrier originated IntermediaryTraffic. Meet Point Billing to IXCs for jointly provided switched access traffic willbe consistent with the most current MECAB billing guidelines.
F. Exchange of records will begin no earlier than ninety days (90) from thelater of the date the contract is signed or the date that all necessary informationas defined in Section Vill. B above is provided. Once Carrier sets up MPBarrangements for Intermediary Traffic, Intermediary Traffic will be subject to onlythe $.002 per minute Intermediary Charge (or such other rate ordered by thestate), and Third Party Termination Charges shall not apply. Notwithstanding theforegoing, in the event a Third Party Carrier continues to charge BellSouth forCarriers' Intermediary Traffic, Carrier agrees to keep BellSouth whole for suchtraffic as stipulated in Section Vll C. above. MPB as described in this Section Villanticipates that Carrier will enter into interconnection or traffic exchangeagreements with Third Party Carriers who terminate traffic originated by Carrier.Carrier will be liable to BellSouth for any charges, costs and fees BellSouth mayincur for delivering Carrier's intermediary Traffic.
IX. Access To Poles, Ducts, Conduits, and Rights of WayBellSouth will provide nondiscriminatory access to any pole, duct, conduit, or
right-of-way owned or controlled by BellSouth pursuant to 47 U.S.C g 224, as amendedby the Act, pursuant to terms and conditions of a license agreement subsequentlynegotiated with BellSouth's Competitive Structure Provision Center.
XI. Access to Telephone Numbers
Carrier is responsible for interfacing with the North American Numbering Planadministrator for all matters dealing with dedicated NXXs. BellSouth will cooperate withCarrier in the provision of shared NXXs where BellSouth is the service provider.
XII. Local Number Portability
The Permanent Number Portability (PNP) database supplies routing numbers forcalls involving numbers that have been ported from one local service provider toanother. PNP is currently being worked in industryforums. The results ofthese forumswill dictate the industry direction of PNP. BelISouth will provide access to the PNPdatabase at rates, terms and conditions as set forth by BellSouth and in accordancewith an effective FCC or Commission directive.
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XIII. Access to Signaling and Signaling Databases
A. BellSouth will offer to Carrier use of BellSouth's signaling network andsignaling databases at BellSouth's published tariffed rates. Signalingfunctionality will be available with both A-link and B-link connectivity.
B. Where interconnection is via B-link connections, charges for the SS7interconnection elements are as follows: 1) Port Charge —BellSouth shall not billan STP port charge nor shall BellSouth pay a port charge; 2) SS7 NetworkUsage - BellSouth shall bill its tariffed usage charge and shall pay usage billedby the Carrier at rates not to exceed those charged by BellSouth; 3) SS7 Link-BellSouth will bill its tariffed charges for only two links of each quad ordered.Application of these charges in this manner is designed to reflect the reciprocaluse of the parties' signaling networks. Where interconnection is via A-linkconnections, charges for the SS7 interconnection elements are as follows: 1)Port Charge - BellSouth shall bill its tariffed STP port charge but shall not pay atermination charge at the Carrier's end office; 2) SS7 Network Usage - BellSouthshall bill its tariffed usage charge but shall not pay for any usage; 3) SS7 Link-BellSouth shall bill its tariffed charges for each link in the A-link pair but shall notpay the Carrier for any portion of those links.
XIV. Network Design and management
A. The parties will work cooperatively to install and maintain reliableinterconnected telecommunications networks, including but not limited to,maintenance contact numbers and escalation procedures. BellSouth will providepublic notice of changes in the information necessary for the transmission androuting of services using its local exchange facilities or networks, as well as ofany other changes that would affect the interoperability of those facilities andnetworks.
B. The interconnection of all networks will be based upon acceptedindustry/national guidelines for transmission standards and traffic blockingcriteria.
C. The parties will work cooperatively to apply sound network managementprinciples by invoking appropriate network management controls to alleviate orprevent network congestion.
D. Interconnection reconfigurations will have to be considered individually asto the application of a charge. Notwithstanding the foregoing, the parties dointend to charge non-recurring fees for any additions to, or added capacity to,any facility or trunk purchased. Parties who initiate SS7 STP changes may becharged authorized non-recurring fees from the appropriate tariffs.
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E. The parties will provide Common Channel Signaling (CCS) information toone another, where available and technically feasible, in conjunction with alltraffic in order to enable full interoperability of CLASS features and functionsexcept for call return. All CCS signaling parameters will be provided, includingautomatic number identification (ANI), originating line information (OLI) callingparty category, charge number, etc. All privacy indicators will be honored, andthe parties agree to cooperate on the exchange of Transactional CapabilitiesApplication Part (TCAP) messages to facilitate full interoperability of CCS-basedfeatures between the respective networks.
F. For network expansion, the parties will review engineering requirementson a periodic basis and establish non-binding forecasts for trunk utilization asrequired by Section IV of this Agreement. New trunk groups will be implementedas stated by engineering requirements for both parties.
G. The parties will provide each other with the proper call information,including all proper translations for routing between networks and anyinformation necessary for billing where BellSouth provides recordingcapabilities. This exchange of information is required to enable each party to bill
properly.
XV. Auditing Procedures
Upon thirty (30) days written notice, each party must provide the other theability and opportunity to conduct an annual audit to ensure the proper billing oftraffic between the parties. The parties will retain records of call detail for aminimum of nine months from which the PLU, the percent intermediary traffic, thepercent interMTA traffic, and the PIU can be ascertained. The audit shall beaccomplished during normal business hours at an office designated by the partybeing audited. Audit requests shall not be submitted more frequently than one(1) time per calendar year. Audits shall be performed by a mutually acceptableindependent auditor paid for by the party requesting the audit. The PLU shall beadjusted based upon the audit results and shall apply to the usage for thequarter the audit was completed, the usage for the quarter prior to thecompletion of the audit, and to the usage for the two quarters following thecompletion of the audit.
XVI. Liability and Indemnification
A. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT ORIN THIS SECTION XVI, NEITHER PARTY SHALL BE LIABLE TO THE OTHERPARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, RELIANCE,PUNITIVE, OR SPECIAL DAMAGES SUFFERED BY THE OTHER PARTY(INCLUDING WITHOUT LIMITATION DAMAGES FOR HARM TO BUSINESS,LOST REVENUES, LOST SAVINGS, OR LOST PROFITS SUFFERED BY THE
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OTHER PARTY), REGARDLESS OF THE FORM OF ACTION, WHETHER INCONTRACT, WARRANTY, STRICT LIABILITY, OR TORT, INCI UDINGWITHOUT LIMITATION NEGLIGENCE OF ANY KIND WHETHER ACTIVE ORPASSIVE, AND REGARDLESS OF WHETHER THE PARTIES KNEW OF THEPOSSIBILITY THAT SUCH DAMAGES COULD RESULT.
B. Neither party shall be liable to the other party for any act or omission ofany other telecommunications company providing a portion of a service underthis Agreement.
C. Neither party shall be liable for damages to the other party's terminallocation, Point of Interface (POI) or customer's premises resulting from thefurnishing of a service, including but not limited to the installation and removal ofequipment and associated wiring, except to the extent caused by a party's grossnegligence, willful or intentional misconduct.
D. Each party shall be indemnified, defended and held harmless by the otherparty against any action, claim, loss, judgment, injury, liability, expense ordamage (collectively "Loss") arising from the other party's acts or omissionsunder this Agreement, including without limitation: 1) claims for libel, slander,invasion of privacy, or infringement of copyright arising from the other party' sown communications; 2) claims for patent infringement arising from combining orusing the service furnished by one party in connection with facilities orequipment furnished by the other party or the other party's customer; 3) anyclaim, loss, or damage claimed by a customer of a party arising from servicesprovided by the other party under this Agreement; or 4) all other claims arisingout of an act or omission of the other party in the course of using servicesprovided pursuant to this Agreement. Each party's liability to the other for anyLoss, including reasonable attorney's fees relating to or arising out of anynegligent act or omission in its performance of this Agreement whether in
contract or in tort, shall be limited to a credit for the actual cost of the services orfunctions not performed or improperly performed.
E. A party may, in its sole discretion, provide in its tariffs and contracts with
its customers and third parties that relate to any service, product or functionprovided or contemplated under this Agreement, that to the maximum extentpermitted by Applicable Law, such party shall not be liable to the customer orthird party for (i) any Loss relating to or arising out of this Agreement, whether in
contract, tort or otherwise, that exceeds the amount such party would havecharged that applicable person for the service, product or function that gave riseto such Loss and (ii) for Consequential Damages. To the extent that a partyelects not to place in its tariffs or contracts such limitations of liability, and theother party incurs a Loss as a result thereof, such party shall indemnify andreimburse the other party for that portion of the Loss that would have been
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limited had the first party included in its tariffs and contracts the limitations ofliability that such other party included in its own tariffs at the time of such Loss.
F. Neither BellSouth nor Carrier shall be liable for damages to the other' sterminal location, POI or other company's customers' premises resulting from thefurnishing of a service, including, but not limited to, the installation and removalof equipment or associated wiring, except to the extent caused by a company'snegligence or willful misconduct or by a company's failure to properly ground alocal loop after disconnection.
G. Under no circumstance shall a party be responsible or liable for indirect,incidental, or consequential damages, including, but not limited to, economicloss or lost business or profits, damages arising from the use or performance ofequipment or software, or the loss of use of software or equipment, oraccessories attached thereto, delay, error, or loss of data (collectively"Consequential Damages" ). In connection with this limitation of liability, eachparty recognizes that the other party may, from time to time, provide advice,make recommendations, or supply other analyses related to the Services, orfacilities described in this Agreement, and, while each party shall use diligentefforts in this regard, the Parties acknowledge and agree that this limitation ofliability shall apply to provision of such advice, recommendations, and analyses.
H. The party providing services hereunder, its Affiliates and its parentcompany, shall be indemnified, defended and held harmless by the partyreceiving services hereunder against any claim, loss or damage arising from thereceiving company's use of the services provided under this Agreementpertaining to (1) claims for libel, slander or invasion of privacy arising from thecontent of the receiving company's own communications, or (2) any Lossclaimed by the customer of the party receiving services arising from suchcompany's use or reliance on the providing company's services, actions, duties,or obligations arising out of this Agreement.
I. Notwithstanding any other provision of this Agreement, claims fordamages by Carrier or Carrier's clients or any other person or entity resultingfrom the gross negligence or willful misconduct of BellSouth shall not be subjectto such limitation of liability.
J. Notwithstanding any other provision of this Agreement claims fordamages by BellSouth or any other person or entity resulting from the grossnegligence or willful misconduct of Carrier shall not be subject to such limitationof liability.
K. Neither party assumes liability for the accuracy of the data provided to it
by the other party.
22 Ver. 5/6/02a
Page 28 of 58 CCCS 23 of 50
Page 29 of 55 CINRS0043
L. No license under patents (other than the limited license to use) is grantedby either party to the other party or shall be implied or arise by estoppel, withrespect to any service offered pursuant to this Agreement.
IN. If the performance of this Agreement, or any obligation hereunder, isprevented, restricted or interfered with by reason of (i) acts of God; (ii) war,revolution, civil commotion, acts of public enemies, acts of terrorism, embargo;(iii) acts of the government in its sovereign capacity; (iv) labor difficulties,including, without limitation, strikes, slowdowns, picketing or boycotts; or (v) anyother circumstances beyond the reasonable control and without the fault ornegligence of the party affected, the party affected, upon giving prompt notice tothe other party, shall be excused from such performance on a day-to-day basisto the extent of such prevention, restriction, or interference (and the other partyshall likewise be excused from performance of its obligations on a day-to-daybasis to the extent such party's obligations are related to the performance soprevented, restricted or interfered with); provided, however, that the party soaffected shall use its best efforts to avoid or remove such causes of non-performance and both Parties shall proceed whenever such causes are removedor cease. Nothing herein shall affect a party's right to interruption or othercredits for failure or delay in performance.
N. EXCEPT AS SPECIFICALLY PROVIDED TO THE CONTRARY IN THISAGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS ORWARRANTIES TO THE OTHER PARTY CONCERNING THE SPECIFICQUALITY OF ANY SERVICES, OR FACILITIES PROVIDED UNDER THISAGREEMENT. THE PARTIES DISCLAIM, WITHOUT LIMITATION, ANYWARRANTY OR GUARANTEE OF MERCHANTABILITY OR FITNESS FOR APARTICULAR PURPOSE, ARISING FROM COURSE OF PERFORMANCE,COURSE OF DEALING, OR FROM USAGES OF TRADE.
O. The obligations of the parties contained within this section XVI shallsurvive the expiration of this Agreement.
XVII. Modification of Agreement
A. BellSouth shall make available, pursuant to 47 USC g 252 and the FCC rulesand regulations regarding such availability, to Carrier any interconnection, service,or network element provided under any other agreement filed and approvedpursuant to 47 USC g 252. The Parties shall adopt all rates, terms and conditionsconcerning such other interconnection, service, or network element and any otherrates, terms and conditions that are interrelated or were negotiated in exchange foror in conjunction with the interconnection, service or network element beingadopted. The adopted interconnection, service, or network element and agreementshall apply to the same states as such other agreement and for the identical term ofsuch other agreement.
23 Ver. 5/6/02a
Page 29 of 58 CCCS 24 of 50
Page 30 of 55 CMRS0043
B. If Carrier changes its name or makes changes to its company structure oridentity due to a merger, acquisition, transfer or any other reason, it is theresponsibility of Carrier to notify BellSouth of said change and request that anamendment to this Agreement, if necessary, be executed to reflect said change.
C. No modification, amendment, supplement to, or waiver of the Agreement orany of its provisions shall be effective and binding upon the Parties unless it is madein writing and duly signed by the Parties.
D. Execution of this Agreement by either party does not confirm or infer that theexecuting party agrees with any decision(s) issued pursuant to theTelecommunications Act of 1996 and the consequences of those decisions onspecific language in this Agreement. Neither party waives its rights to appeal orotherwise challenge any such decision(s) and each party reserves all of its rights topursue any and all legal and/or equitable remedies, including appeals of any suchdecision(s).
E. In the event that any effective legislative, regulatory, judicial or other legalaction materially affects any material terms of this Agreement, or the ability of Carrieror BellSouth to perform any material terms of this Agreement, Carrier or BellSouthmay, on thirty (30) days' written notice require that such terms be renegotiated, andthe Parties shall renegotiate in good faith such mutually acceptable new terms asmay be required. In the event that such new terms are not renegotiated within
ninety (90) days after such notice, the Dispute shall be referred to the DisputeResolution procedure set forth in Section XX.
XVIII. Taxes and Fees
A. Definition: For purposes of this section, the terms "taxes" and "fees"shall include but not be limited to federal, state or local sales, use, excise, grossreceipts or other taxes or tax-like fees of whatever nature and howeverdesignated (including tariff surcharges and any fees, charges or other payments,contractual or otherwise, for the use of public streets or rights of way, whetherdesignated as franchise fees or otherwise) which are imposed, or sought to beimposed, on or with respect to the services furnished hereunder or measured bythe charges or payments therefor.
B. Taxes And Fees Imposed Directly On Either Providing Party OrPurchasing Party.
1. Taxes and fees imposed on the providing party, which are neitherpermitted nor required to be passed on by the providing party to itscustomer, shall be borne and paid by the providing party.
Ver. 5/6/02a
Page 30 of 58 CCCS 25 of 50
Page 31 of 55 CMRS0043
2. Taxes and fees imposed on the purchasing party, which are notrequired to be collected and/or remitted by the providing party, shall beborne and paid by the purchasing party.
C. Taxes And Fees Imposed On Purchasing Party But Collected AndRemitted By Providing Party.
1. Taxes and fees imposed on the purchasing party shall be borne bythe purchasing party, even if the obligation to collect and/or remit suchtaxes or fees is placed on the providing party.
2. To the extent permitted by applicable law, any such taxes and feesshall be shown as separate items on applicable billing documentsbetween the Parties. Notwithstanding the foregoing, the purchasing partyshall remain liable for any such taxes and fees regardless of whether theyare actually billed by the providing party at the time that the respectiveservice is billed.
3. If the purchasing party determines that in its opinion any suchtaxes or fees are not payable, the providing party shall not bill such taxesor fees to the purchasing party if the purchasing party provides writtencertification, reasonably satisfactory to the providing party, stating that itis exempt or otherwise not subject to the tax or fee, setting forth the basistherefor, and satisfying any other requirements under applicable law. Ifany authority seeks to collect any such tax or fee that the purchasingparty has determined and certified not to be payable, or any such tax orfee that was not billed by the providing party, the purchasing party shallhave the right, at its own expense, to contest the same in good faith, in itsown name or on the providing party's behalf. In any such contest, thepurchasing party shall promptly furnish the providing party with copies ofall filings in any proceeding, protest, or legal challenge, all rulings issuedin connection therewith, and all correspondence between the purchasingparty and the governmental authority.
4. In the event that all or any portion of an amount sought to becollected must be paid in order to contest the imposition of any such taxor fee, or to avoid the existence of a lien on the assets of the providingparty during the pendency of such contest, the purchasing party shall beresponsible for such payment and shall be entitled to the benefit of anyrefund or recovery.
5. If it is ultimately determined that any additional amount of such atax or fee is due to the imposing authority, the purchasing party shall paysuch additional amount, including any interest and penalties thereon.
25 Ver. 5/6/02a
Page 31 of 58 CCCS 26 of 50
Page 32 of 55 GNIRS0043
6. Notwithstanding any provision to the contrary, the purchasing partyshall protect, indemnify and hold harmless (and defend at the purchasingparty's expense) the providing party from and against any such tax or fee,interest or penalties thereon, or other charges or payable expenses(including reasonable attorney fees) with respect thereto, which areincurred by the providing party in connection with any claim for or contestof any such tax or fee.
7. Each party shall notify the other party in writing of any assessment,proposed assessment or other claim for any additional amount of such atax or fee by a governmental authority; such notice to be provided at leastten (10) days prior to the date by which a response, protest or otherappeal must be filed, but in no event later than thirty (30) days afterreceipt of such assessment, proposed assessment or claim.
8. The purchasing party shall have the right, at its own expense, toclaim a refund or credit, in its own name or on the providing party's behalf,of any such tax or fee that it determines to have paid in error, and thepurchasing party shall be entitled to any recovery thereof.
D. Taxes And Fees Imposed On Providing Party But Passed On ToPurchasing Party.
1. Taxes and fees imposed on the providing party, which are requiredto be passed on by the providing party to its customer, shall be borne bythe purchasing party.
2. To the extent permitted by applicable law, any such taxes and feesshall be shown as separate items on applicable billing documentsbetween the parties. Notwithstanding the foregoing, the purchasing partyshall remain liable for any such taxes and fees regardless of whether theyare actually billed by the providing party at the time that the respectiveservice is billed.
3. If the purchasing party disagrees with the providing party' sdetermination as to the application or basis of any such tax or fee, theparties shall consult with respect to the imposition and billing of such taxor fee and with respect to whether to contest the imposition of such tax orfee. Notwithstanding the foregoing, the providing party shall retainultimate responsibility for determining whether and to what extent anysuch taxes or fees are applicable, and the purchasing party shall abide bysuch determination and pay such taxes or fees to the providing party.The providing party shall further retain ultimate responsibility fordetermining whether and how to contest the imposition of such taxes or
26 Ver. 5/6/02a
Page 32 of 58 CCCS 27 of 50
Page 33 of 55 GMRS0043
fees; provided, however, that any such contest undertaken at the requestof the purchasing party shall be at the purchasing party's expense.
4. In the event that all or any portion of an amount sought to becollected must be paid in order to contest the imposition of any such taxor fee, or to avoid the existence of a lien on the assets of the providingparty during the pendency of such contest, the purchasing party shall beresponsible for such payment and shall be entitled to the benefit of anyrefund or recovery.
5. If it is ultimately determined that any additional amount of such atax or fee is due to the imposing authority, the purchasing party shall paysuch additional amount, including any interest and penalties thereon.
6. Notwithstanding any provision to the contrary, the purchasing partyshall protect, indemnify and hold harmless (and defend at the purchasingparty's expense) the providing party from and against any such tax or fee,interest or penalties thereon, or other charges or payable expenses(including reasonable attorney fees) with respect thereto, which areincurred by the providing party in connection with any claim for or contestof any such tax or fee.
?. Each party shall notify the other party in writing of any assessment,proposed assessment or other claim for any additional amount of such atax or fee by a governmental authority; such notice to be provided, ifpossible, at least ten (10) days prior to the date by which a response,protest or other appeal must be filed, but in no event later than thirty (30)days after receipt of such assessment, proposed assessment or claim.
E. Mutual Cooperation. In any contest of a tax or fee by one party, the otherparty shall cooperate fully by providing records, testimony and such additionalinformation or assistance as may reasonably be necessary to pursue thecontest. Further, the other party shall be reimbursed for any reasonable andnecessary out-of-pocket copying and travel expenses incurred in assisting insuch contest.
XIX. Treatment of Proprietary and Confidential Information
A. It may be necessary for BellSouth and Carrier, each as the "Discloser, " toprovide to the other party, as "Recipient, " certain proprietary and confidentialinformation (including trade secret information) including but not limited totechnical, financial, marketing, staffing and business plans and information,strategic information, proposals, request for proposals, specifications, drawings,maps, prices, costs, costing methodologies, procedures, processes, businesssystems, software programs, techniques, customer account data, call detail
27 Ver. 5/6/02a
Page 33 of 58 CCCS 28 of 50
Page 34 of 55 CMRS0043
records and like information (collectively the alnformation"). All such Informationconveyed in writing or other tangible form shall be clearly marked with aconfidential or proprietary legend. Information conveyed orally by the Discloserto Recipient shall be designated as proprietary and confidential at the time ofsuch oral conveyance, shall be reduced to writing by the Discloser within forty-five (45) days thereafter, and shall be clearly marked with a confidential orproprietary legend. Notwithstanding the foregoing, all Information in any party' spossession that would constitute Customer Proprietary Network Information ofthe party or the parties' customers pursuant to any federal or state law or therules and regulations of the FCC or Commission, and any Information developedor received by a party regarding the other party's facilities, services, volumes,or usage shall automatically be deemed confidential Information for all purposes,even if not marked as such, and shall be held confidential as is required forInformation.
B. Use and Protection of Information. Recipient agrees to protect suchInformation of the Discloser provided to Recipient from whatever source fromdistribution, disclosure or dissemination to anyone except (i) to employees ofRecipient with a need to know such Information solely in conjunction withRecipient's analysis of the Information, (ii) to Recipient's attorney and otherprofessionals under a duty to protect client confidences, and (iii) for no otherpurpose except as authorized herein or as otherwise authorized in writing by theDiscloser. Recipient will not make any copies of the Information inspected by it,and shall use the same standard of care to protect Information as it would use toprotect is own confidential information.
C. ~Exce tiona. Recipient will not have an obligation to protect any portion ofthe Information which:
(a) is made publicly available by the Discloser or lawfully by a nonparty tothis Agreement; (b) is lawfully obtained by Recipient from any sourceother than Discloser; (c) is previously known to Recipient without anobligation to keep it confidential; or (d) is released from the terms of thisAgreement by Discloser upon written notice to Recipient.
D. Recipient agrees to use the Information solely for the purposes ofnegotiations pursuant to 47 U.S.C. 251 or in performing its obligations under thisAgreement and for no other entity or purpose, except as may be otherwiseagreed to in writing by the Parties. Nothing herein shall prohibit Recipient fromproviding information requested by the Federal Communications Commission ora state regulatory agency with jurisdiction over this matter, or to support arequest for arbitration or an allegation of failure to negotiate in good faith.Furthermore, a Recipient may also disclose all Information it is required orordered to disclose by law, a court, or governmental agency, as long as theDiscloser has been notified of the required disclosure within a reasonable time
Ver. 5/6I02a
Page 34 of 58 CCCS 29 of 50
Page 35 of 55 CMRS0043
after the Recipient becomes aware of its requirement to disclose. The Recipientrequired to disclose the Information shall take all lawful measures to avoiddisclosing the Information called for until the Discloser of the Information hashad a reasonable time to seek and comply with a protective order issued by acourt or governmental agency of competent jurisdiction that with respect to theInformation otherwise required to be disclosed.
E. Recipient agrees not to publish or use the Information for any advertising,sales promotions, press releases, or publicity matters that refer either directly orindirectly to the Information or to the Discloser or any of its affiliates.
F. The disclosure of Information neither grants nor implies any license to theRecipient under any trademark, patent, copyright, or application which is now ormay hereafter be owned by the Discloser.
G. Survival of Confidentialit Obli ations. The Parties' rights and obligationsunder this Section XIX shall survive and continue in effect until two (2) yearsafter the expiration or termination date of this Agreement with regard to allInformation exchanged during the term of this Agreement. Thereafter, theParties' rights and obligations hereunder survive and continue in effect withrespect to any Information that is a trade secret under applicable law.
XX. Resolution of Disputes
Except as otherwise stated in this Agreement, if any dispute arises as to theinterpretation of any provision of this Agreement or as to the proper implementation ofthis Agreement, the parties will initially refer the issue to the appropriate companyrepresentatives. If the issue is not resolved within 30 days, either party may petitionthe Commission for a resolution of the dispute, or to the extent that the Commissiondoes not have jurisdiction or declines to review the dispute, then the FCC. However,each party reserves the right to seek judicial or FCC review of any ruling made by theCommission concerning this Agreement.
XXI. Waive rs
Any failure or delay by either party to insist upon the strict performance by theother party of any of the provisions of this Agreement shall not be deemed a waiver ofany of the provisions of this Agreement, and each party, notwithstanding such failure,shall have the right thereafter to insist upon the specific performance of any and all ofthe provisions of this Agreement.
XXII. Assignment
Any assignment by either arty to any non-Affiliated entity of any right, obligation or duty,or of any other interest hereunder, in whole or in part, without the prior written consent
29 Ver. 5/6/02a
Page 35 of 58 CCCS 30 of 50
Page 36 of 55 CMRS0043
of the other party shall be void. A party may assign this Agreement or any right,obligation, duty or other interest hereunder to an Affiliate of the party without theconsent of the other party; provided, however, that the assigning party shall notify theother party in writing of such assignment thirty (30) days prior to the Effective Datethereof. The Parties shall amend this Agreement to reflect such assignments and shallwork cooperatively to implement any changes required due to such assignment. Allobligations and duties of any party under this Agreement shall be binding on allsuccessors in interest and assigns of such party. No assignment or delegation hereofshall relieve the assignor of its obligations under this Agreement in the event that theassignee fails to perform such obligations.
XXIII. Amendment
This Agreement may not be amended in any way except upon written consent ofthe parties.
XXIV. Severability
ln the event that any provision of this Agreement shall be held invalid, illegal, orunenforceable, it shall be severed from the Agreement and the remainder of thisAgreement shall remain valid and enforceable and shall continue in full force andeffect; provided however, that if any severed provisions of this Agreement are essentialto any party's ability to continue to perform its material obligations hereunder, theparties shall immediately begin negotiations of new provisions to replace the severedprovisions.
XXV. Survival
Any liabilities or obligations of a party for acts or omissions prior to thecancellation or termination of this Agreement, any obligation of a party under theprovisions regarding indemnification, confidential information, limitations of liability andany other provisions of this Agreement which, by their terms, are contemplated tosurvive (or be performed after) termination of this Agreement, shall survive expiration ortermination thereof for a period of two (2) years.
XXVI. Governing Law
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the state in which service is provided, without regard to itsconflict of laws principles, and the Communications Act of 1934 as amended by the Act.
30 Ver. 5/6/02a
Page 36 of 58 CCCS 31 of 50
Page 37 of 55 CMRS0043
XXVII. Arm's Length Negotiations
This Agreement was executed after arm's length negotiations between theundersigned parties and reflects the conclusion of the undersigned that this Agreementis in the best interests of all parties.
XXVIII. Filing of Agreement
Upon execution of this Agreement it shall be filed with the appropriate stateregulatory agency pursuant to the requirements of Section 252 of the Act. If theregulatory agency imposes any filing or public interest notice fees regarding the filingor approval of the Agreement, Carrier shall be responsible for publishing the requirednotice and the publication and/or notice costs shall be borne by Carrier.
XXIX. Notices
A. Every notice, consent, approval, or other communications required orcontemplated by this Agreement shall be in writing and shall be delivered inperson, via overnight mail, or given by postage prepaid mail, address to:
BellSouth Telecommunications,Inc.675 W. Peachtree St. N. E.Suite 4300Atlanta, Georgia 30375Attn: Legal Dept. "Wireless "
Attorney
T-Mobile USA, Inc.
12920 SE 38' Si.Bellevue, WA 98006ATTN: General CounselCC: Carrier Management
CC: Randy Ham, Director WirelessInterconnection
or at such other address as the intended recipient previously shall havedesignated by written notice to the other party.
B. Where specifically required, notices shall be by certified or registeredmail. Unless otherwise provided in this Agreement, notice by mail shall beeffective on the date it is officially recorded as delivered by return receipt orequivalent, and in the absence of such record of delivery, it shall be presumed tohave been delivered the fifth day, or next business day after the fifth day, after itwas deposited in the mails; and by overnight mail, the day after being sent.
C. Except as otherwise provided in this Agreement, "writing" or "written" maymean electronic (including E-mail transmissions where receipt is acknowledgedby the recipient, but excluding voice-mail), or hard copy, including by facsimile
3 I Ver. 5/6/02a
Page 37 of 58 CCCS 32 of 50
Page 38 of 55 CMRS0043
(with acknowledgment of receipt from the recipient's facsimile machine) unlessotherwise stated.
XXX. Headings of No Force or Effect
The headings of Articles and Sections of this Agreement are for convenience ofreference only, and shall in no way define, modify or restrict the meaning orinterpretation of the terms or provisions of this Agreement.
XXXI. Multiple Counterparts
This Agreement may be executed multiple counterparts, each of which shall bedeemed an original, but all of which shall together constitute but one and the samedocument. A facsimile copy of a party's execution of this Agreement shall be valid andbinding upon the party and must be followed as soon as practicable thereafter by theoriginal version of such execution.
XXXII. Entire Agreement
This Agreement, together with its preamble, recitals and all its Attachments(incorporated herein by this reference), all of which, when taken together, are intendedto constitute one indivisible agreement. This Agreement sets forth the entireunderstanding and supersedes prior agreements between the parties relating to thesubject matter contained herein and merges all prior discussions between them.Neither party shall be bound by any definition, condition, provision, representation,warranty, covenant or promise, pre-printed form or other instrument, other than asexpressly stated in this Agreement or as is contemporaneously or subsequently setforth in writing and executed by a duly authorized officer or representative of the partyto be bound thereby. In the event of any conflict between the term(s) of this Agreementand those of an applicable tariff, the terms of this Agreement shall control.
XXXIII. No Joint Venture
The parties are independent contractors and nothing herein shall be construedto imply that they are partners, joint venturers or agents of one another.
XXXIY. Remedies Cumulative
Except as otherwise expressly provided in this Agreement, each of the remediesprovided under this Agreement is cumulative and is in addition to any remedies thatmay be available at law or in equity.
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Page 38 of 58 CCCS 33 of 50
Page 39 of 55 GMRS0043
XXXV. No Third Party Beneficiaries
Except as may be specifically set forth in this Agreement, this Agreement doesnot provide and shall not be construed to provide any person not a party or properassignee or successor hereunder with any beneficial interest, remedy, claim, liability,reimbursement, cause of action, or other privilege arising under or relating to thisAgreement.
XXXYI. References to Other Documents
Whenever any provision of this Agreement refers to a technical reference,technical publication, any publication of telecommunications industry administrative ortechnical standards, or any other document specifically incorporated into thisAgreement, it will be deemed to be a reference to the most recent version or edition(including any amendments, supplements, addenda, or successors) or such documentsthat is in effect, and will include the most recent version or edition (including anyamendments, supplements, addenda, or successors) or each document incorporatedby reference in such a technical reference, technical publication, or publication ofindustry standards. Should there be an inconsistency between or among publicationsor standards or if there is a bona-fide dispute as to what is the most recent version oredition, the parties shall mutually agree upon which requirement shall apply.
XXXYII. Miscellaneous
References to the "Term" include any extensions thereto.
WHEREFORE, the parties have caused this Agreement to be executed by their dulyappointed representatives as follows:
BellSouth Telecommunications, Inc. T-Mobile USA, Inc.
By: signature on file
Name: Randy J. Ham
By: signature on file
Name: Abdul Saad
Title: Assistant Director—Wireless Interconnection
Date: 5/8/03
Title: Vice President-Systems Engr. 8Netwrk. 0 ns.Date: 5/2/03
33 Ver. 5/6/02a
Page 39 of 58 CCCS 34 of 50
Page 40 of 55 CINRS0043
Attachment A
AFFILIATES
VoiceStream GSM I Operating Company, LLC
VoiceStream GSM II Holdings, LLC
VoiceStream Houston, Inc. fka Aerial Houston, Inc.
VoiceStream PCS BTA I Corporation
Cook Inlet/VS GSM IV PCS, LLC
Powertel/Birmingham, Inc.
Powertel/Memphis, Inc.
Powertel/Kentucky, Inc.
Powertel/Atlanta, Inc.
Powertel, Inc.
VoiceStream Tampa/Orlando, Inc. fka Aerial Tampa/Orlando, Inc.
VoiceStream Central Communications, Inc. f/k/a Aerial Communications, Inc.
Omnipoint Holdings, Inc.
Powertel/Jacksonville, Inc.
Eliska Wireless Venture I, Inc. f/k/a Digiph PCS, Inc.
Ver. 5/6/02a
Page 40 of 58 CCCS 35 of 50
Page 41 of 55 CNIRS0043
Attachment 8-1
CMRS Local Interconnection Rates(All rates are Per Minute of Use)
Effective date through June 14, 2003Type 1 (End Office Switched)Type 2A (Tandem Switched)Type 2B Dedicated End Office)
$.0010$.0010$.0010
June 15, 2003 through June 14, 2004(If such dates are applicable during the term of this Agreement)Type 1 (End Office Switched) $.0007Type 2A (Tandem Switched) $.0007Type 2B Dedicated End Office) $.0007
35 Ver. 5/6/02a
Page 41 of 58 CCCS 36 of 50
Page 42 of 55 CMRS0043
Attachment B-2
Type 1, Type 2A, 8 2B Mobile To Land Trunk Usage(All Rates are Per Voice Grade Trunk)
Mobile originated IntraMTA traffic over Type 1, Type 2A and Type 2B trunks, whichterminate at BellSouth Tandems (Local or Access) and/or BellSouth End Offices,without recordin ca abilit, may be billed in either of two ways. Carrier may choose toeither be billed a surrogate usage rate, on a per voice grade trunk basis, for mobileoriginated Traffic completed over one-way outward or two way trunks or may choose toprovide Traffic data in a company prescribed format to be used for billing purposes.Carriers' provided Traffic data will be billed at the rates prescribe in Attachment B-1. Ifthe Carrier chooses to provide Traffic data, then the detail level provided must be inaccordance with BellSouth reasonable requirements. Traffic data must be provided nomore that 30 days in arrears from the close of the normal billing cycle. If the Trafficdata is not received in the BellSouth prescribed format in the specified time period, thesurrogate usage rate set forth in this Attachment will be applied. Surrogate Usage forIntraMTA mobile originated Traffic, which terminates in BellSouth's local service area,shall be billed at a per voice grade trunk level rate as follows:
All BellSouth States~Te 1 TYPE 2A ~Te 2B
Effective DateThru June 14, 2003 $13.00 $13.00 $13.00
June 15, 2003Thru June 14, 2004 (If such dates are applicable during the term of this Agreement)
$9.10 $9.10 $9.10
36 Ver. 5/6/02a
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Page 44 of 55 CMRS0043
AMENDMENTTO THE
AGREEMENT BETWEENT-MOBILE USA, INC.
ANDBELLSOUTH TELECOMMUNICATIONS, INC.
DATED MAY 1, 2003
Pursuant to this Amendment, (the "Amendment" ), T-Mobile USA, Inc. ("T-Mobile" ), and BellSouth Telecommunications, Inc. ("BellSouth"), hereinafter referred tocollectively as the '"Parties", hereby agree to amend that certain InterconnectionAgreement bebveen the Parties dated May 1, 2003 ',"Agreement" ).
1, 2003, and;WHEREAS, BelISouth and T-Mobile entered into the Agreement on May
NOW THEREFORE, in consideration of the mutual provisions containedherein and other good and valuable considerations, the receipt and sufficiency of whichare hereby acknowledged, the Parties hereby covenant and agree as follows:
1. Attachment A of the Agreement is hereby deleted in its entiretyand replaced with a new Attachment A as set forth in Exhibit 1 tothis Amendment, incorporated herein by this reference.
2. All of the other provision of the Agreement, dated May 1, 2003,shall remain in full force and effect.
3. Either or both of the Parties is authorized to submit this Amendment tothe respective state regulatory authorities for approval subject to Section252(e) of the Federal Telecommunications Act of 1996.
IN WITNESS WHEREOF. the Parties hereto have caused thisAmendment to be executed by their respective duly authorized representatives on thedate indicated below.
B:Telecommunications, I c. T-Mo bil SP
I
Name: Randy 3. Ham
Title: Assistant Director—Wireless Interconnection
Dave Mayo
finance lanmng
Title:Engineeflng 8 Technicaf'Ooefat
Ifa Iona
Date:
Page 44 of 58 CCCS 39 of 50 [CCCS Amendment 2 of 4]
Page 45 of 55 CMRS0043-AMENDMENTEXHIBIT 1
ATTACHMENT A
KNLF620KNLF621
KNLF 622
KNLF623KNLF 624KNLF618KNLF 619KNLG925
KNLG 369KNLF 222
KNLF258
KNLF273WPXE651
WPXE650
KNLF517WPXE649KNLH402
KNLH403
KNLH416
KNLH417KN'LH408
KNLH409
KNLH400
KNLH401KNLH398
KNLH399
KNLG209
KNLH397
KNLH412
KNLH413
KNLH406
KNLH407KNLH404
KNLH405
KNLH410
KNLH411
KNLH420
KNLF 255
B042- C3B154-CB186-CB246 —CB292 - ClB302- CB343 - C
B269 - FB009 - FM011 - BM029 —BM037 —AM015 - A6
M017 - A2
B320- AB152-AB052- DB052 —EB083 -D
B083 —EB098 - DB098 - EB135 —D
B135—EB252 —DB252 - EB263 - DB263 - EB273 - DB273 —EB338 - DB338 - EB339 - DB339 - EB423 - DB423 - EB232 -EM028- A
Biloxi-Gul ort-Pasca oula, MSFort Walton Beach, FL
Hattiesbur, MSLaurel, MSMeridian, MS
Mobile, ALPensacola, FL
McComb-Brookhaven, MS
Alexandria, LA
Atlanta, GA
Birmingham, AL
Jacksonville, FLMiami-Ft. Lauderdale, FL
New Orleans- Baton Rouge, LA
New Orleans- Baton Rou e, LAFt. Pierce, FLBowling Green-Glasgow, KYBowling Green-Glasgow, KY
Clarksville, TN
Clarksville, TN
Corbin, KYCorbin, KYEvansville, IN
Evansville, INLexington, KYLexington, KY
Louisville, KYLouisville, KYMadisonville, KYMadisonville, KYOwensboro, KYOwensboro, KYPaducah-Murray-Mayfield, KYPaducah-Murray-Mayfield, KYSomerset, KY
Somerset, KYKnoxville, TN
Memphis-Jackson, KY
Eliska Wireless Ventures License Subsidi I, L.L.CEliska Wireless Ventures License Subsidiary I, L.L.C,
Eliska Wireless Ventures License Subsidiary I, L.L.C.Eliska Wireless Ventures License Subsidiary I, L.L.CEliska Wireless Ventures License Subsidiary I, L.L.C.Eliska Wireless Ventures License Subsidiary I, L.L.C.Eliska Wireless Ventures License Subsidiary I, L.L.C.Eliska Wireless Ventures License Subsidiary I, L.L.C.Eliska Wireless Ventures License Subsidiary I, L.L.C.Powertel Atlanta Licenses, Inc.Powertel Birmingham Licenses, Inc.Powertel Jacksonville Licenses, IncPower tel Jacksonville Licenses, Inc.
Powertel Jacksonville I.icenses, Inc.LA CVIS IV License Sub 1, LLCVoice Stream Tam a/Orlando, IncPower tel Kentucky Licenses, Inc.Powertcl Kentucky Licenses, Inc.
Powertel Kentucky Licenses, Inc.
Powertel Kentucky Licenses, Inc.
Powertel Kentuc Licenses, Inc.
Powertel Kentuck Licenses, Inc.Powertel Kentucky Licenses, Inc.
Powertel Kentuc Licenses, Inc.Powertel Kentucky Licenses, Inc.Powertel Kentucky Licenses, Inc.
Powertel Kentucky Licenses, Inc.Power tel Kentuck Licenses, Inc.Powertel Kentuc Licenses, Inc.Powertel Kentucky Licenses, Inc.Powertcl Kentucky Licenses, Inc.Powertel Kentucky Licenses, Inc.Powertel Kentucky Licenses, Inc.
Powertel Kentucky Licenses, Inc.Powertel Kentucky Licenses, Inc.
Powertel Kentucky Licenses, Inc.Power tel Knoxville Licenses, Inc.Powertel Memphis Licenses, Inc.
1/2
Page 45 of 58 CCCS 40 of 50 [CCCS Amendment 3 of 4]
Page 46 of 55 CMRS0043-AMENDMENTEXHIBIT 1
KNLH418
KNLH419
KNLH414
KNLH415WPVN593
IV~F978WPXE649
KNLF979KNLG277KNLF 225
KNLF 980KNLG724
WPXE649WPOJ732
KNLG288KNLF 968
WPOJ734
WPUD910KNLH746
KNLG729
KNLF 951WPUD912
WPUD911
WPOJ736KNLH748
KNLG759
KNLF504
KNLF 952KNLG810
WPOJ738KNLG766
WPSF245
KNLF 947WPOJ808
WPUD913KNLG777
KNLH347
KNLG779
KNLG830
KNLF948
B096—DB096 —EB314-DB314-EM015 - A4
B293 - EM015 - A8
B293 - FB408 - FM013 - A
B469 - FB469 - EB357 - A4
B151 —A
B032 - CB044 - DB125 - EB125 - CB147 - C3B153 - DB152 - FB158 - FB178-C4B177-C4
B180-CB182 —DB193 - D
B195- C1-15B198 —FB219 - EB236- CB257- DMTA040 -A4
B271 - FB304 - C2
BTA312 - C4B348 —DB367 - EB367- DB387- EB410 —F
Cookeville, TN
Cookeville, TN
Nashville, TN
Nashville, TNNaples, FLMiami-Ft. Lauderdale, FLMiami-Ft. Lauderdale, FLMiami-Ft. Lauderdale, FLSarasota-Bradenton, FLTampa-St. Petersburg-Orlando, FL
West Palm Beach-Boca Raton, FLWest Palm Beach-Boca Raton, FLPortland-Brunswick, MEFort Myers, FLBaton Rouge, LA
Birmin am, ALEl Dorado-Magnolia-Camden, AR
El Dorado-Ma nolia-Camden, ARFlorence, SCFort Smith, ARFt. Pierce-Vero Beach-Stuart FL
Gadsden, ALGreenwood, SCGreenville-Spartanburg, SC
Hammond, LAHarrison, AR
Hot Springs, ARHouma-Thibodaux LA
Huntsville, ALJonesboro-Paragould, AR
Lafa ette-New Iberia, LALittle Rock, ARLittle Rock, AR
Macon-Warner Robins, GAMonroe. LA (C2-15)
Myrtle Beach, SCPine Bluff AR
Quincy, IL-Hannibal, MO
Quincy, IL-Hannibal, MO
Russellville, AR
Savannah, GA
Powertel Nashville Licenses, Inc.Powertel Nashville Licenses, Inc.
Powertel Nashville Licenses, Inc.Powertel Nashville Licenses, Inc.Voice Stream Houston, Inc.Omnipoint Miami E License, LLCVoice Stream Tampa/Orlando, Inc.
VoiceStream GSM II, LLCVoiceStream GSM II, LLC.Voice Stream Tampa/Orlando, Inc.
VoiceStream GSM II, LLCOmni oint Holdin s, Inc.VoiceStream Tam a/Orlando, Inc.Voice Stream Tampa/Orlando, Inc.VoiceStream GSM I, LLC
VoiceStream GSM II, LLCOmnipoint Little Rock-El Dorado E License, LLCVoiceStream GSM I, L.L.CVoiceStream PCS BTA I License Corporation
VoiceStream PCS BTA I License Corporation
Cook Inlet/VS GSM IV PCS, LLC
VoiceStream GSM II, LLCVoiceStream PCS BTA I License CorporationVoiceStream PCS BTA I License Corporation
VoiceStream GSM I, L.L.CVoiceStream PCS BTA I License Corporation
VoiceStream PCS BTA I License Corporation
CIVS IV License Sub I, LLC
VoiceStream GSM II, LLCVoice Stream PCS BTA I License Corporation
VoiceStream GSM I, LLCVoiceStream PCS BTA I License Corporation
Omnipoint Holdings, Inc.
Voice Stream GSM II, LLCCook Inlet/VS GSM VI PCS, LLC
Voice Stream PCS BTA I License CorporationVoice Strealn PCS BTA I License Corporation
Omnipoint Wichita-E. Hutchinson E License, LLCVoice Stream PCS BTA I License Corporation
Voice Stream PCS BTA I License Corporation
VoiceStream GSM II, LLC
2/2
Page 46 of 58 CCCS 41 of 50 [CCCS Amendment 4 of 4]
Page 47 of 55 CMRS0043
SECOND AMENDMENTTO THE
INTERCONNECTION AGREEMENT BETWEENBELLSOUTH TELECOMMUNICATIONS, INC.
ANDT-MOBILE USA, INC.DATED MAY 1, 2003
Pursuant this Amendment, (the "Amendment" ) and BellSouth Telecommunications,Inc. , and T-Mobile USA, Inc. hereinafter referred to collectively as the "Parties, "
herebyagree to amend that certain Interconnection Agreement between the Parties dated May 1,2003.
WHEREAS, the BellSouth Telecommunications, Inc. and T-Mobile USA, Inc.entered into the Agreement on May 1, 2003; and
NOW THEREFORE, in consideration of the mutual promises and covenantscontained herein and other good and valuable consideration, the receipt and sufficiencyof which are hereby acknowledged, the Parties hereby covenant and agree as follows:
1. The Parties agree to delete all references to the state of Louisiana from thisAgreement.
2. The Parties agree to delete subsection A. of Section III., Term of theAgreement and replace it with the following:
A. The term of this Agreement shall be the Effective Date as set forthabove and shall expire as of November 1, 2006. The Agreement shall applyto the BellSouth territory in the states of Alabama, Florida, Georgia,Kentucky, Mississippi, North Carolina, South Carolina and Tennessee.
The Parties agree to delete subsection C of Section III., Term of theAgreement and replace it with the following:
C. Either Party's request under this Section will, for purposes, be treatedas a request under Section 252 of the Act for negotiation received by anincumbent local exchange carrier and will begin the process of voluntarynegotiations. If, as of the expiration of this Agreement, a SubsequentAgreement has not been executed by the Parties, this Agreement shallcontinue in full force and effect, on a month-to-month basis, while the Partiesare within negotiation/arbitration process outlined in Section 252 of theTelecommunications Act, as may be amended. If the Section 252 process isabandoned, then this Agreement shall automatically renew for additional six(6} month term, unless either Party provides written notice of termination to
Page 47 of 58 CCCS 42 of 50 [CCCS Amendment 1 of 4]
Page 48 of 55 CMRS0043
the other Party at least sixty (60) days prior to the end of the then-currentterm.
4. The Parties agree to delete subsection C. of Section Vll. , Non-Local TrafficInterconnection and replace it with the following:
C. If Non-Local Traffic originated by Carrier is delivered by BellSouth fortermination to the network of a third party telecommunications carrier that isuniquely identifiable ("Third Party Carrier" ), then BellSouth will bill Carrierand Carrier shall pay a $.003 per minute intermediary charge for suchIntermediary Traffic in addition to any charges that BellSouth may beobligated to pay to the Third Party Carrier (collectively called "Third PartyTermination Charges" ). Third Party Termination Charges may changeduring the term of this Agreement, and the appropriate rate shall be the ratein effect when the traffic is terminated. The Parties agree the percentage ofNon-Local Traffic delivered to BellSouth by Carrier shall be subject toIntermediary Charges and Third Party Termination Charges. BellSouth shallnot deliver Intermediary Traffic to Carrier for termination to a Third PartyCarrier, and therefore, Carrier shall not bill BellSouth any intermediarycharges. Intermediary Traffic transiting BellSouth's network to Carrier is notLocal Traffic and Carrier shall not bill BelISouth for Intermediary Traffictransiting BellSouth's network. In addition, Carrier shall not bill BellSouth forTraffic received by BellSouth from an interexchange carrier for delivery toCarrier.
The Parties agree to delete subsection F. of Section Vill. , Meet Point Billingand replace it with the following:
Exchange of records will begin no earlier than ninety (90) days fromthe later of the date the contract is signed or the date that all
necessary information as defined in Section VII.B. above is provided.Once Carrier sets up MPB arrangements for Intermediary Traffic,Intermediary Traffic will be subject to only the $.003 per minuteIntermediary Charge (or such other rate ordered by the state), andThird Party Termination Charge shall not apply. Notwithstanding theforegoing, in the event a Third Party Carrier continues to chargeBellSouth for Carriers' Intermediary Traffic, Carrier agrees to keepBellSouth whole for such traffic as stipulated in Section VII.C. above.MPB as described in this Section Vill anticipates that Carrier will
enter into interconnection or traffic exchange agreements with ThirdParty Carriers who terminate traffic originated by Carrier. Carrier will
be liable to BellSouth for any charges, costs and fees BellSouth mayincur delivering Carrier's Intermediary Traffic.
6. All of the other provisions of the Interconnection Agreement, dated May 1,2003, shall remain in full force and effect.
Page 48 of 58 CCCS 43 of 50 [CCCS Amendment 2 of 4]
Page 49 of 55 CMRS0043
7. Either or both of the Parties is authorized to submit this Amendment to eachPublic Service Commission for approval subject to Section 252(e) of theFederal Telecommunications Act of 1996.
Page 49 of 58 CCCS 44 of 50 [CCCS Amendment 3 of 4]
Page 50 of 55
Signature PageCMRS 0043
IN WITNESS WHEREOF, the Parties have executed this Amendment the day and yearwritten below.
BellSouth Telecommunications, Inc. T-Mobile USA, Inc.
Name: Randy J. HamAssistant Director-
Title: Wireless Interconnection
Date:
Name:
Title:
Date:
Qne Ilc)
[CCCS Amendment 4 of 4]
Page 50 of 58 CCCS 45 of 50 [CCCS Amendment 4 of 4]
Page 51 of 55CMRS0043
Amendment to the Agreement8etvvcen
T-Mobile USA, Inc,and
BellSouth Telecommunications, Inc„d/b/a ATkT Alabama, ATILT Florida, ATE&T Georgia, ATILT Kentucky,
A'FkT Mississippi, ATILT North Carolina, ATkT South Carolinaal)d ATILT TennesseeEffective May t, 2003
Pursuant to this Amendment, {the "Amendment" ), T-Mobile, USA, Inc, ("T-Mobile")and BeIISouth Telecommunications, Inc. , now d/b/a ATkT Alabama„ATILT Florida, ATILTGeorgia, AT8f T Kentucky, ATkT Mississippi„ATILT Notth Carolina, ATILT South Carolinaand
ATILT
Tennessee (collectively, "ATkT"), hereinafter referred to collectively as the"Parties", hereby agree to amend that certain Interconnection Agreement between the Partieseffective May I, 2003 (the "Agreement" ).
WHEREAS, ATILT and T-Mobile entered into the Agreement effective May I, 2003,
WHEREAS, the Parties desire to amend the Agreement in order to extend the term of theAgreement:
NOW THEREFORE, in considei'ation of the mutual provisions contained herein andother good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the Parties hereby covenant and agree as follows:
I. The term of the Agreement shall be extended three (3) years from the date ofT-Mobile's '
extension request to 3anuary 7, 2011.
2. EXCEPT AS MODIFIED HEREIN, ALL OTHER TERMS AND CONDITIONS OF THE AGREEMENT
SHALL REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
3. In entering into this Amendment, neither Party waives, and each Party expressly reserves, any rights,
remedies or arguments it may have at law or under the intervening law or regulatory change provisions
in the underlying Agreement (including intervening law rights asserted by either Party via wntten notice
predating this Amendment) with respect to any orders, decisions, legislation or proceedings and anyremands thereof, which the Parties may have not yet incorporated into the Agreement or which may bethe subject of further review.
4. This Amendment shall be filed with and is subject to approval by the respective State Cornfnissions in
which the Agreement has been filed and approved; this Amendment shall be effective upon approval by the
respective State Commissions (the "Effective Date").
Page 51 of 58 CCCS 46 of 50 [CCCS Amendment 1 of 2]
Page 52 of 55CMRS0043
IN WITNESS WHEREOF, the Parties have executed this Agreement the day and year writtenbelow.
SellSonth Teleeomtnnnieations, Ine. ,by ATkT Operations, Ine., its anthorixed agent. 'I'-Mobile, US
Name: kathv Wilson-Chu
'I"itle: Dire tor
Date:L1
Name; Bee Ident-F-"91Uprnent
~itle:
Date:
T-Mgllllt, Lstltl kloof(n
Page 52 of 58 CCCS 47 of 50 [CCCS Amendment 2 of 21
Page 53 of 55 CMRS0043
Amendment to the AgreementBetween
T-Mobile USA, Inc.and
BellSouth Telecommunications, Inc.,d/b/a AT&T Alabama, AT&T Florida, AT&T Georgia, AT&T Kentucky,
AT&T Mississippi, AT&T North Carolina, AT&T South Carolinaand AT&T TennesseeEffective May 1, 2003
Pursuant to this Amendment, (the "Amendment" ), T-Mobile, USA, Inc. ("T-Mobile")and BellSouth Telecommunications, Inc. , now d/b/a AT&T Alabama, AT&T Florida, AT&TGeorgia, AT&T Kentucky, AT&T Mississippi, AT&T North Carolina, AT&T South Carolinaand AT&T Tennessee (collectively, "AT&T"),hereinafter referred to collectively as the"Parties", hereby agree to amend that certain Interconnection Agreement between the Partieseffective May 1, 2003 (the "Agreement" ).
and:WHEREAS, AT&T and T-Mobile entered into the Agreement effective May 1, 2003,
WHEREAS, the Parties desire to amend the Agreement to update the affiliates listed inAttachment A;
NOW THEREFORE, in consideration of the mutual provisions contained herein andother good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the Parties hereby covenant and agree as follows:
1. Delete from the Agreement Attaclunent A and replace with Attachment A to this Amendment,which is incorporated herein by reference:
2. EXCEPT AS MODIFIED HEREIN, ALL OTHER TERMS AND CONDITIONS OF THEAGREEMENT SHALL REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
3. In entering into this Amendment, neither Party waives, and each Party expressly reserves, anyrights, remedies or arguments it may have at law or under the intervening law or regulatorychange provisions in the underlying Agreement (including intervening law rights asserted byeither Party via written notice predating this Amendment) with respect to any orders,decisions, legislation or proceedings and any remands thereof, which the Parties may have notyet incorporated into the Agreement or which may be the subject of further review.
4. This Amendment shall be filed with and is subject to approval by the respective StateCommissions in which the Agreement has been filed and approved; this Amendment shall beeffective the date of the last signature executing the amendment (the "Effective Date"),
Page 53 of 58 CCCS 48 of 50 [CCCS Amendment 1 of 3]
Page 54 of 55
IN %ITNESS %HEREOF, the Parties have executed this Agreefnent the day and year writtenbelow.
SellSouth Telecotntnunications, Inc„by ATILT Operations, Inc.,its authoriM Agent,
T-Mobile USA, Inc.
Naraae: EddieA. Reed jr.
te; irecto -In ere e tio A rimments 8 nansei'
- Kngineeriny4 Development
'to L&gsl 0)
Page 54 of 58 CCCS 49 of 50 [CCCS Amendment 2 of 3]
Page 55 of 55 CMRS0043
Attachment A
AFFILIATES
T-Mobile South LLCPowerteVMemphis, Inc.SunCom Wireless Operating Company, L.L.C.
Page 55 of 58 CCCS 50 of 50 [CCCS Amendment 3 of 3]
Page 2 of 3 AMENDMENT —WHEREAS CLAUS /AT&T-22STATE
PAGE10F2HALO WIRELESS
VERSION —03/25/1 0~m TEII AO~IOETBETWEEN
HALO WIRELESS, INC.
AND
BELLSOUIH'IHZCOMNJMCATIONS, INC. , DB/AAT&TAIA;B~ AT&TPIOIOOAATATIIEOIIOIA, ATATEEEOXET AT&TEOEOEIPPI ATOT
NORTH CAROLINA, AT&T SOUTH CAROLINA AND AT&T TENNESSEE
This Amendment (the "Amendment" ) amends the Interconnection Agreement by and betweenBellSouth Telecommunications, Inc. , d/b/a AT&T Alabama, ATBT Florida, ATBT Georgia, AT&T Kentucky,ATBT Mississippi, AT&T North Carolina, ATBT South Carolina and ATBT Tennessee (collectively, OAT&TO)
and Halo Wireless, Inc. (ECarrier"). AT&T and Carrier are hereinafter referred to collectively as the "Parties"and individually as a "Party",
WHEREAS, ATBT and Carrier are Parties to an Interconnection Agreement under Sections 251 and252 of the Communications Act of 1934, as amended (the EActo), dated, ; and
NOW, THEREFORE, in consideration of the promises and mutual agreements set forth herein, theParties agree to amend the Agreement as follows:
1. The Parties agree to add the following language after the second "Whereas" clause:
Whereas, the Parties have agreed that this Agreement will apply only to (1) traffic that originates onAT&T's network or is transited through ATB T's network and is routed to Carrier's wireless network
for wireless termination by Carrier; and (2) traffic that originates through wireless transmitting and
receiving facilities before Carrier delivers traffic to AT&T for termination by ATBT or for transit toanother network.
2. EXCEPT AS MODIFIED HEREIN, ALL OTHER TERMS AND CONDITIONS OF THE UNDERLYING
AGREEMENT SHALL REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
3. This Amendment shall not modify or extend the Effective Date or Term of the underlying Agreement,
but rather, shall be coterminous with such Agreement.
4. In entering into this Amendment, neither Party waives, and each Party expressly reserves, any rights,
remedies or arguments it may have at law or under the intervening law or regulatory change provisions
in the underlying Agreement (including intervening law rights asserted by either Party via written notice
predating this Amendment) with respect to any orders, decisions, legislation or proceedings and anyremands thereof, which the Parties have not yet fully incorporated into this Agreement or which may bethe subject of further review.
5. This Amendment shall be filed with and is subject to approval by the respective State Commissions and
shall become effective ten (10) days following approval by such Commissions.
Page 57 of 58
Page 3 of 3AMENDMENT -WHEREAS CLAUS /AT&T. 22STATE
PAGE20F 2HALO WIRELESS
VERSION —03/25/10
Halo Wireless, inc. BellSouth Telecommunications, Inc., d/b/aAT&T Alabama, d/b/a AT&T Florida, dlb/aAT&T Georgia, d/b/a AT&7 Kentucky, d/b/aAT&T Mississippi, d/b/a AT&T North Carolina,d/b/a AT&T South Carolina, d/b/a AT&TTennessee; by AT&7 Operations, Inc., theirauthorized agent
B;
Name: Eddie A. Reed, Jr,
Title:
Date: g.— 2 g - 2 e1 Q
Title: Director-Interconnection A reements
Date: C]0
Page 58of58
CBRTlnny Administrative Law8BOARD
Ms. Marlene H. Dortch
Secretary
Federal Communications Commission
445 Twelfth Street, SWRoom TWB-204Washington, DC 20554
August 12, 2011
~ iaIII MCCOLLOUGHi HEN avic dotLA W.bizW. Scott McCollough
1250 South Capital of Texas Highway, Bldg 2-235West Lake Hills, Texas 78746
Phone: 512.888.1112Fax: 512.692.2522wsmcdotlaw. biz
Ex Parte Notice
RE: Connect America Fund, WC Docket No. 10-90;A National Broadband Plan for OurFuture, GN Docket No. 09-51; Establishing Just and Reasonable Rates for LocalExchange Carriers, WC Docket No. 07-135;High-Cost Universal Service Support, WCDocket No. 05-337; Developing an Unified Intercarrier Compensation Regime, CCDocket No, 01-92;Federal-State Board on Universal Service, CC Docket No. 96-45
Dear Ms. Dortch.
Halo Wireless, Inc. hereby gives notice that it met with the Commission persons
identified below on August 10, 2011.The Halo representatives were Russ Wiseman, Halo's
President and Chief Operating Officer, counsel Steven Thomas of McGuire, Craddock 8z
Strother, P.C and counsel W. Scott McCollough of McColloughlHenry, P.C. The Commission
participants were:
Wireline Competition Bureau: Randy Clarke, Travis Litman, John Hunter, Al Lewis,
Richard Hovey, Rebekah Goodheart and Marcus Maher
Wireless Telecommunications Bureau: Joseph Levin
Enforcement Bureau: Margaret Dailey
The purpose of the meeting was to introduce Halo to the Commission, describe Halo's
operations and to respond to certain assertions made by various RLECs in recent filings and
meetings with the Commission in the context of the above-cited proceedings. Halo distributed
the attached document that served as the basis for discussion during the meeting.
Si
Co
erely,
cCollough
n el for Halo Wireless, Inc.
FCC Meeting
Wireline Competition Bureau and WirelessTelecommunications Bureau
Halo Wireless, Inc.Connect America Fund, WC Docket No. 10-90
A National Broadband Plan for Our Future, GN Docket No. 09-51
Establishing Just and Reasonable Rates for Local Exchange Carriers, WC Docket No. 07-135
High-Cost Universal Service Support, WC Docket No. 05-337
Developing an Unified Intercarrier Compensation Regime, CC Docket No. 01-92
Federal-State Board on Universal Service, CC Docket No. 96-45
August 10, 2011
A enda
~Introduce Halo representatives
~Provide FCC staff an overview of Halo Wireless, Inc.
~Address questions and allegations raised by ILECs in statecomplaints
'QUA
~ 4 ~ I I
Halo Wireless has built an all IP network, presently in 28markets across the U.S., using 3.65 Ghz spectrum and
802.16(e) Wi-Max wireless access technology
San Francisco
.-Chicago
Detroit
Charlotte
Dallas-Fort Worth
Atlanta
Tampa-Orlando
Houston
Southeast FL
New Orleans:
Cleveland
Cincinnati-Dayton
St Louis
I ' ~
Amargosa Valley, -NM
Tulare, CA
. - Danville, IL
Britton, MI
Orangeburg, SC--.:=-
Tyler, TX
Cartersville, GA
Palm Coast, FL
Brenham, TX
Bonita Springs, FL
Hammond, LA:
Huntsburg, OH
Wilrnington, OH
Wentzville, MO
Milwaukee
Louisville
Memphis-Jackson
Birmingham
In.dianapolis '
San Antonio
Kansas City
Jacksonville
Columbus.
Little Rock
OKC
Nashville
Knoxville
Tulsa
0 ' I
- New Glaru's„WI
Paducah, KY
- Gieenvilie, MS
Graysville, AL
Portland-, :IN-
Pleasanton, TX
Junction'City, KS
Green Cove Springs, FL
, Carroll, OH
Van Buren, AR
Henryetta, ' OK
Gainesboro, TN
Amherst, :TN
Enid, OK
11"% ~ l ~ I
a o Wireless has invested substantial capital in its 3.65 GhzWiMax 802.16(e) wireless network.
Halo Wireless's core network is all IP from customerwireless access points up through the IP-TDM conversion
for ILEC traffic exchange. '
TPA Linka
A Links
CPE~IA'lt
&BC p, p
Type 2A
AT
CPE~I Bll' SBC Type 2A
MGW
AT
Halo is a legitimate, independent business with a novel,legal business strategy.
Leverage the availability of 3.65Ghz spectrum and WiMax mobileaccess technology to offer tmo sets of services in rural areas:
Ql Broadband ~ireless mobile voice and data services to retailconsumers and small businesses in under served rural communitiesthroughout the U.S.
Voice service currently requires soft client ruing on laptop.Awaiting FCC certification on Airpsan USB device.Testing integrated 3.65/WiFi access points for enhancedmobility.Evaluating iphone/Android smart phone clients.
o Hundreds of thousands of marketing dollars spent to date;small base of retail customers acquired, with continued e8ortsto expand base underway.
Halo is a legitimate, independent business with a novel,legal business strategy.
Leverage the availability of 3.65Ghz spectrum and WiMax mobileaccess technology to offer two sets of services in rural areas:
Q2 Common Carrier wireless exchange services to ESP and enterprisecustomers.~ One primary customer; other arrangements under development~ Customer connects wirelessly to Halo base stations in each MTA. All
traffic traversing interconnection arrangements originates fromcustomer with wireless link to base station in same MTA.
~ Halo transmits intelligence of the customer's choosing.~ Operating Rules and Requirements:
o Must obtain interconnection agreements with ILECs to enable trafficexchange across wide footprint, starting with principal ILEC thatoperates primary tandems.
o Only traffic destined to telephone exchange in the same MTA in whichthe tower resides is accepted for termination over this link; all othertraffic is routed to an IXC for handling, and exchange access chargesare paid.
Halo's detractors are railing at the rules, but blaming Halo.
Are Halo's services CMRS?
Halo's small volume customers can make and receive calls using softclients on laptop computers or tablets connected to mobile/nomadic CPE.While not as elegant as a mobile phone, these services are functionallyequivalent to that where traditional handset is used.Halo's high volume service offering is also CMRS, as the customer connectsto Halo's base station using wireless equipment which is capable ofoperation while in motion.
The customer is originating calls to Halo by virtue of its exercise of theright to attach to the network and use telecommunications. See, In ReAtlantic Richfield Co , 3 FC.C Rd 3089. (1988), aff'd PUC of Texas v. FCC, 886F.2d 1325 (D.C. Cir. 1989).
Halo's detractors are railing at the rules, but blaming Halo.
Is Halo's traffic local IntraMTA'?
~ The origination point for Halo traffic is the base station to which Halo'scustomers connect wirelessly.
~ Halo is transmitting, between or among points specified by the user,information of the user's choosing.
~ The customer is originating calls to Halo by virtue of its exercise of theright to attach to the network and use telecommunications. See, In ReAtlantic Richfield Co., 3 FCC Rd 3089. (1988), aff'd PUC of Texas v. FCC, 886I-'.2d 1325 (D.C. Cir. 1989).
~ Halo's voice service is entirely within the MTA, and is therefore telephoneexchange service, not telephone toll.
~ Halo does not provide roaming.
Halo's detractors are railing at the rules, but blaming Halo
Halo's signaling practices follow industry standards and comply withthe FCC's proposed "Phantom Traffic" rules
~ Halo connects to the customer using WiMax, an IP-based technology fullycapable of supporting native SIP communications.
~ Halo locates the SIP header information corresponding to the Calling PartyNumber and populates the address in the SS7 ISUP IAM CPN parameteraddress signal location. Halo does not change or manipulate thisinformation in any way; it is protocol converted and populated withoutchange.
~ Since Halo's customer is the responsible party, Halo also populates the SS7Charge Number parameter with a Halo number corresponding to thecustomer's BTN for that MTA.
~ The FCC's proposed phantom traffic rules would require precisely thepractices Halo has adopted.
~ ' ~ I I
Halo's detractors are railing at the rules, but blaming Halo.RLEC Interconnection Activities
~ Halo has accepted proper requests for interconnection from almost 50RLECs, and the parties are currently in 5 252 negotiations. Halo is payinginterim compensation to those carriers.
~ The RLECs where we have disputes:~ Do not like the "no compensation if no contract or request for interconnection"
result prescribed in T-Mobile, and criticize Halo for relying on that result.~ Refuse to follow rule 20.11(e)requiring them to both "request interconnection"
and "invoke the negotiation and arbitration procedures contained in section 252of the Act."We believe they are motivated by desire to receive very high non-TELRIC prices for termination and are concerned that if they "requestinterconnection" they may have to interconnect via IP.
~ Are misusing the "5 252 process" to challenge and limit Halo's activities
pursuant to federal permissions.~ Their desired result is to deem Halo's traffic as subject to access charges, not
5 251(b)(5), and classify Halo as an IXC rather than a CMRS provider.~ Statutory service definitions and FCC precedent do not support these outcomes.
The issues raised by the RLECs fall exclusively within theFCC's jurisdiction, and are not suitable for state
commissions~ Neither Congress nor the Commission have delegated enforcement of 5 332
and rule 20.11 to the states.~ The states have delegated power to conduct arbitrations, but only for topics covered by
5 251 (unless the parties voluntarily consent to negotiate without regard to standards in theAct).
~ Halo continues to be prepared to negotiate, and if necessary arbitrate, forinterconnection agreements implementing the mandatory topics.
~ The debate is not about how to implement the RLECs' 5 251(a), (b) and/or (c) duties. Rather,the RLECs are challenging CMRS' right to enter the market with a new business model andcompete directly with the incumbents for telephone exchange and exchange access service.
~ Only the FCC can decide whether an activity is or is not "wireless" or"CMRS"; and the FCC has already decided when a CMRS service constitutes"telephone exchange service" vs. "telephone toll. "
~ The scope and nature of "permitted activities" under a nationwide FCC license is not aproper topic for state-level arbitration.
~ One nationwide license cannot have 50 variations, and cannot be subjected to 50 state-levelcases and 50 state-level re-hearings of FCC decisions.
12
~CgBT1F1$D. Administrative Law~BOARD
Written Ex Parte' Via Electronic FilinMarlene H. DortchSecretaryFederal Communications Commission445 12'" Street, S,W,Washington D.C. 20554
October 17, 2011
~ ~gIII MCCOLLOUGH~HENRYic dotLA W.bizW. Scott McCollough
1250 South Capital of Texas Highway, Bldg 2-235West Lake Hills, Texas 78746
Phone: 512.888.1112Fax; 512.692.2522wsmcdotlaw. biz
RE: Connect America Fund, WC Docket No. 10-90; A National Broadband Plan forOur Future, GN Docket No. 09-51; Establishing Just and Reasonable Rates forLocal Exchange Carriers, WC Docket No. 07-135; High-Cost Universal ServiceSupport, WC Docket No. 05-337; Developing an Unified IntercarrierCompensation Regime, CC Docket No. 01-92; Federal-State Board on UniversalService, CC Docket No. 96-45
Dear Ms. Dortch:
Pursuant to 47 C.F.R. g 1.1206 of the Commission's rules, Halo Wireless, Inc. ("Halo" )respectfully submits this written ex parte communication into the above-captioned proceedings.This letter responds to the submission of the Eastern Rural Telecom Association ("ERTA") dated
October 14, 2011.'
ERTA's submission makes a number of false representations of material fact, and
mischaracterizes Halo and its traffic. The allegations that Halo is engaging in some kind of fraud,
is refusing in any way to compensate ILECs for termination, and is sending "phantom traffic" or"laundering traffic" are all completely baseless. ERTA members are entitled to their own
opinions, but they are not entitled to their own facts. Apparently, they believe that repeated
prevarication somehow makes it all true. The Commission, however, cannot engage in this kind
of magical thinking.
Halo is a CMRS provider. As such, it can and does provide "telephone exchange
service. " Halo has authority from this Commission to provide CMRS-based telephone exchange
service to any "end user" business customer that has its own wireless CPE and connects to Halo
in an MTA, thereby obtaining the ability to originate and receive calls within that MTA. The
service arrangement at issue uses new technology, but it is functionally the same as what an
ILEC provides to a business customer with a PBX. This is merely a new and promising wireless
telephone exchange service to end users. The other thing ERTA refuses to acknowledge is that
Halo also has consumer customers that are presently enjoying 4G wireless broadband in rural
areas. We thought the Commission wanted CMRS to compete with the ILECs and to deploy
' Available at htt://f allfoss. fcc. ov/ecfs/document/view? id=7021714450.
See Local Competition Order'lt 1004, 1006, 1008.
wireless broadband to consumers. Were all of the statements to this effect in countless reportsand orders not the true sentiment and goal?
Halo's "high volume" customer is an end user, not an IXC. Two different courts —in fourseparate opinions —have so held. Those courts held that Halo's "high volume" customer is fullyentitled to purchase telecommunications service as an end user, and cannot be compelled tosubscribe to the ILECs' exchange access tariffs. See Transcom Enhanced Services, LLC WrittenEx Parte (October 11,2011). Halo is providing "end user" telephone exchange service toTranscom. Every Halo-related call that the ILECs are terminating is originated by Transcom
using wireless CPE in the same MTA. This traffic is not exchange access traffic. It is, as a matterof law, subject to f 251(b)(5), since it is intraMTA and "non-access. "
Further, this traffic is not "phantom traffic. "The RLECs receive sufficient signalinginformation to identify and bill the appropriate provider. " All Halo traffic contains address
signal content in both the CPN and CN parameters. Neither Halo nor Transcom manipulate orchange CPN address signal content. Halo does populate the CN with a Halo number, but that isperfectly in accord with industry standards. This is exactly what any ILEC would do when
serving a business user that has an ISDN PRI PBX and originates a call from a station with an
identifier other than the Billing Telephone Number ("BTN")associated with the PBX system.
The RLECs can obviously identify both the end user customer originating the call (Transcom)and the "responsible carrier" (Halo). They know the entity from whom they may seek reciprocalcompensation: Halo.
Since Halo and the ERTA members do not at present have an interconnection agreement,
and since all of the traffic involved is "non-access, " the applicable compensation regime is "no
compensation. "This is exactly the express result imposed by the Commission in T-Mobile. T-
Mobile also provides a remedy. If the ERTA members wish to be paid reciprocal compensation
then all they need to do is notice Halo that they "request interconnection" and desire to "invoke
the negotiation and arbitration procedures contained in section 252 of the Act."From and after
receipt of that notice the ERTA members will be entitled to reciprocal compensation, under theCommission's "interim" rules. See 47 C.F.R. $ 20.11(e).
Halo is already paying reciprocal compensation to over 50 ILECs. More than 50% ofHalo's monthly operating expense is related to these payments. ERTA's assertion that Halo
Available at htt //f'allfoss fcc ov/ecfs/document/view iid=7021713675.
See NPRM and FNPRM, Connect America Fund et al. , WC Docket Nos, 10-90 et al., FCC 11-13,'j[ 37 and note719, 26 FCC Rcd 4554 (Feb. 9, 2011)("20II ICC NPRM") (defining "phantom traffic" as "unidentifiable andunbillable" because the terminating provider cannot "identify and bill the appropriate provider. ")
See 47 C.F.R. g 20.11(d).
Declaratory Ruling and Report and Order, In the Matter ofDeveloping a Unified Intercarrier CompensationRegime, T-Mobile et al. Petition for Declaratory Ruling Regarding Incumbent LEC Wireless Termination Tariffs,CC Docket 01-92, FCC 05-42, 20 FCC Rcd 4855 (2005) ("T-Mobile" ). Note 57 expressly provides that "Under theamended rules, however, in the absence of a request for an interconnection agreement, no compensation is owed fortermination, "
~ ~ WR
~ ++III MCCOLLOUGH~HENRY c
refuses to pay anything is flatly incorrect. They simply will not follow the rules or use the
remedy given to them. When they use the T-Mobile remedy they will be paid reciprocalcompensation from and after the date of a 20.1 1(e)-compliant notice.
The ERTA members, however, are not satisfied with the prospect of payment that"merely" recovers "a reasonable approximation of the additional costs of terminating" thesecalls. See f 252(d)(2)(A)(ii). Instead, they desire payment in the form of exchange access, and
for every minute regardless of whether they have invoked P 20.1 1(e). In order to accomplish thisresult they have engaged in a campaign of repeated defamation of both Halo and its "highvolume" end user customer before state commissions and the FCC. They falsely and incorrectlyclaim that Halo is not "really" CMRS"; the calls are not "really wireless" and Halo's customer is"really" just an IXC. They also constantly repeat scurrilous and unsupported claims that Haloand/or its "high volume" customer are engaging in signaling improprieties.
The bottom line is that they are simply not telling the truth, and they refuse to acceptwhat the Act and rules require. The Commission cannot and should not accept their
characterizations or reward them for their misdeeds by trying to impose exchange access on what
is clearly telephone exchange service traffic. When ERTA truly wants to be paid for terminating
calls, all they have to do is use the 47 C.F.R. P 20.1 1(e) remedy the Commission gave them.
They should be sending "requests for interconnection" to Halo instead of engaging in ex partecommunications that would violate 47 C.F.R. p 1.17 if proffered in an adjudicatory proceedingas part of their illicit attempts to recover amounts they are not due.
Res e tfully Submitted
W. S t McColloughCoun el or Halo Wireless, Inc.
~ ~ NN
~~ LNN MCCQLLOUGH~HENRY,
BEFORE THE TENNESSEE REGULATORY AUTHORITY
NASHVILLE, TENNESSEE
January 26, 2012
IN RE: )) DOCKET NO.
BELLSOUTH TELECOMMUNICATIONS LLC D/B/A ATILT ) 11-00119TENNESSEE V. HALO WIRELESS, INC. )
ORDER
This matter came before Chairman Kenneth C. Hill, Director Sara Kyle and Director Mary
W. Freeman of the Tennessee Regulatory Authority ("Authority" or "TRA"), the voting panel
assigned to this docket, at a regularly scheduled Authority Conference held on January 23, 2012 for
consideration of the Complaint filed by BellSouth Telecommunications, LLC d/b/a AT&T
Tennessee ("AT&T")against Halo Wireless, Inc. ("Halo" ) and Halo's Motion to Dismiss Complaint
8'ith Prejudice.
TRAVEL OF THE CASE
On July 26, 2011, AT&T filed a Complaint against Halo, pursuant to 47 U.S.C. g 252 and
TRA Rule 1220-1-2-.02, requesting that the TRA issue an order "allowing it to terminate its
wireless Interconnection Agreement ("ICA") with Halo based on Halo's material breaches of that
ICA."' The Complaint also states that AT&T "seeks an Order requiring Halo to pay AT&T
Tennessee the amounts Halo owes" as a result of "an access charge avoidance scheme. " On
August 10, 2011, Halo filed a Suggestion of Bankruptcy informing the TRA that "on August 8,
2011 Halo filed a voluntary petition under Chapter 11 of Title 11 of the United States Code in the
'Complaint, p. 1 (July 26, 2011).ld.
United States Bankruptcy Court for the Eastern District of Texas (Sherman Division)"
("Bankruptcy Court" ). Accordingly, Halo stated, "the automatic stay is now in place" and
"prohibits further action against [Halo] in the instant proceeding. '
On August 19, 2011, Halo filed a notice of removal to federal district court, which
references a separate notice of removal and states that this matter has been removed to the United
States District Court for the Middle District of Tennessee, Nashville Division ("District Court" )
"pursuant to 28 U.S.C. g 1452 and Rule 9027 of the Federal Rules of Bankruptcy Procedure. " On
November 10, 2011, AT&T filed a letter informing the TRA that it may now hear this matter, the
District Court having remanded it to the TRA and the Bankruptcy Court having lifted the automatic
stay on a limited basis. AT&T requested that this matter be placed on the agenda for the Authority
Conference scheduled for November 21, 2011 "for appointing a Hearing Of5cer and other action as
necessary. " On November 17, 2011, Halo filed a Motion to Abate, in which Halo requested that
the TRA "abate" this proceeding until conclusion of Halo's appeal of the Bankruptcy Court's
October 26, 2011 Order to the United States Court of Appeals for the Fifth Circuit.
At the regularly scheduled Authority Conference held on November 21, 2011, the Authority
voted unanimously to deny the Motion to Abate and to convene a contested case in this matter and
appoint Chairman Kenneth C. Hill as Hearing Officer to handle any preliminary matters, including
entering a protective order, ruling on any intervention requests, setting a procedural schedule, and
addressing other preliminary matters. Immediately following the Authority Conference, the
Hearing Officer convened a scheduling conference in this matter.
Suggestion ofBankruptcy, p. 1 (August 10, 2011).Id. at 2.Notice ofRemoval to Federal Court, p. 1 (August 19, 2011).Letter trom Joelle Phillips to Chairman Kenneth C. Hill (November 10, 2011).Order Denying Motion to Abate, Convening a Contested Case and Appointing a Hearing Ogicer (December 19,
2011).
On December 1, 2011, Halo filed Halo Wireless, Inc. 's Partial Motion to Dismiss and
Answer to the Complaint ofBellSouth Telecommunications, LLC dlbla AT&T Tennessee ("Partial
Motion to Dismiss" ), and AT&T filed its response to Halo's motion on December 8, 2011. The
Hearing OfBcer heard arguments from AT&T and Halo (collectively, "the Parties" ) on the Partial
Notion to Dismiss on December 12, 2011, and issued an order denying the Partial Motion to
Dismiss on December 16, 2011. The Parties submitted pre-filed direct testimony of their witnesses
on December 19, 2011, and pre-filed rebuttal testimony on January 3, 2012. In addition, the Parties
submitted pre-hearing memoranda on January 6, 2012.
MOTION TODISNISS COMPLAINT 8 ITIIPREJUDICE
AAer business hours on Friday, January 13, 2012, Halo filed Halo Wireless, Inc. 's Notice of
Nay 16, 2006 Order Confirming Plan of Reorganization of Transcom Enhanced Services and
Motion to Dismiss Complaint With Prejudice ("Motion to Dismiss Complaint With Prejudice" ). At
the beginning of the Hearing on January 17, 2012, Chairman Hill addressed the Notion to Dismiss
Complaint With Prejudice, giving AT&T an opportunity to respond and setting the matter for
consideration during the January 23, 2012 Authority Conference. AT&T filed BellSouth
Telecommunications, LLC dba AT&T Tennessee's Response to Halo Wireless, Inc's Motion to
Dismiss Complaint With Prjeudice ("Response" ) on January 19, 2012.
As more fully explained in the discussion of AT&T's Complaint below, Halo's business
plan is centered on their assertion that Transcom Enhanced Services, Inc. ("Transcom") is an
Enhanced Service Provider ("ESP"). In its Motion to Dismiss Complaint With Prjeudice, Halo
requests that the TRA dismiss AT&T's Complaint with prejudice on the grounds that during
Order Denying Motion to Dismiss (December 16, 2011).
Transcom's 2005 bankruptcy proceeding, BellSouth/ATILT Corporation were creditors/parties in
interest. ' In the Transcom Bankruptcy Court's April 28, 2005 Memorandum Opinion, the Court
concluded that "[Transcom]'s service is an enhanced service, not subject to payment of access
charges. "" Some of the creditors appealed the April 28, 2005 order to the United States District
Court for the Northern District of Texas, Dallas Division ("Transcom District Court" ), but the
Transcom District Court dismissed the appeal as moot and vacated the bankruptcy court's Order
and Memorandum Opinion.'
However, the Transcom Bankruptcy Court entered an order on May
16, 2006 confirming Transcom's bankruptcy plan."
In this Confirmation Order, the Transcom
Bankruptcy Court again stated that Transcom's services are not subject to access charges, but rather
qualify as information services and enhanced services that must pay end-user charges. ' No creditor
appealed the May 16, 2006 Order. " Halo argues that because this Confirmation Order is binding,
AT8cT cannot challenge Transcom's status as an ESP.' In addition, Halo asserts that resjudicata
or collateral estoppel bars the claims that have been litigated in the bankruptcy court.
To assert a resjudicata defense, a party must establish: 1) the parties must be identical in
both suits; 2) the prior judgment must have been rendered by a court of competent jurisdiction; 3)
there must have been a final judgment on the merits; and 4) the same cause of action must be
involved in both cases. ' Halo claims that these standards are satisfied because 1) BellSouth was a
party to the Transcom bankruptcy case and litigants who have a close and significant relationship
(e.g. Transcom/Halo) satisfy the "identical parties" test; 2) the Transcom Bankruptcy Court had
' Transcom filed a voluntary petition for Chapter 11 bankruptcy in the United States Bankruptcy Court for the NorthernDistrict of Texas, Dallas Division, ("Transcom Bankruptcy Court" ) on February 18, 2005 in Case No. 05-31929-HDH-11 ("Transcom bankruptcy" ). See Motion to Dismiss Complaint fVith Prej udice, p. 2, $ 3 (January 13,2012).' Motion to Dismiss Complaint lYith Prjeudice, p. 2, I 4 (January 13, 2012).
Id. at3, $7.lt Id
Id. at4, $10.l4 Id' Id. at4, $11.' Id. at6, $14.' Id. at 6, $ 17, citing Osherow v. Ernst & Young, LLP (In re Intelogic Trace, Inc.), 300 F.3d 382, 386 (5th Cir. 2000).
jurisdiction over the 2006 Confirmation Order; 3) the 2006 Confirmation Order is final; and 4) the
two actions are based on the same nucleus of operative facts, because the primary issue in both
proceedings is whether Transcom provides enhanced services. '
Collateral estoppel precludes a party from litigating an issue already raised in an earlier
action if: 1) the issue at stake is identical to the one involved in the earlier action; 2) the issue was
actually litigated in the prior action; and 3) the determination of the issue in the prior action was a
necessary part of the judgment in that action. 'Halo asserts that l) AT&T's Complaint confronts
the authority with an identical issue to that raised in the 2006 Transcom Bankruptcy Court's
Confirmation Order, i.e. that Transcom is an ESP not subject to access charges; 2) the issue was
litigated in 2006 in the Transcom bankruptcy proceeding; and 3) the determination that Transcom is
an ESP was a necessary part of the Confirmation because if it were not, the Plan would not have
been feasible and the Confirmation would have been denied.
AT&T opposes the Motion to Dismiss Complaint With Prejudice on the grounds that the
Motion is at odds with the Federal Communications Commission's ("FCC")Connect America Fund
Order. AT&T argues that none of the Transcom bankruptcy court proceedings or other earlier21
proceedings cited by Halo is binding on either AT&T or the Authority. None of the Transcom
Bankruptcy Court orders states or suggests that Transcom actually is an end-user, and none of them
implies or says anything about the termination or origination of calls. Rather, an ESP is treated as
' Motion to Dismiss Complaint 8i'th Prej udice, pp. 7-8,g 18-26 (Jtmuary 13,2012).' Id. at 10,$ 28, citing Petro-Hunt, L.L.C. v. US., 365 F.2d 385, 397 (5th Cir, 2004).
Id. at 10-11,Q 27-30.Response, p. 1 (January 19, 2012); See Report and Order and Further Notice ofProposed Rulemaking, In the Matter
of Connect America Fund; A National Broadband Plan for Our Future; Establishing Just and Reasonable Rates forLocal Exchange Carriers; High-Cost Universal Service Support; Developing an Unified Intercarrier Compensation
Regime; Federal-State Board on Universal Service; Lifeline and Link-Up; Universal Service Reform —Mobility Fund,WC Docket Nos. 10—90, 07—135,05—337, 03—109; GN Docket No. 09—51; CC Docket Nos. 01—92, 96-45; WT DocketNo. 10—208; FCC 11—161, FCC Rcd ("Connect America Fund Order" ) (November 18,2011).
Response, p. 3 (January 19,2012).~old, at4,
an end-user for the purpose of being exempted from access charges, nothing more. Further the
exemption applies only to ESPs, not carriers (like Halo) that transport calls for ESPs. AT&T
asserts that the Authority rejected Halo's res judicata and collateral estoppel arguments when it
rejected Halo's Partial Motion to Dismiss. AT&T further asserts that resjudicata and collateral
estoppel cannot apply because: 1) the main order Halo relies upon was vacated by the federal
district court; 2) the bankruptcy cases involved Transcom, not Halo, and therefore were not
between identical parties; 3) the Transcom bankruptcy cases did not involve the same cause of
action as this case, since this case involves claims for Halo's breach of a contract that was not even
formed until after the bankruptcy cases, while the bankruptcy cases involved the issue of whether
Transcom was subject to access charges; and 4) the issue in this case (whether Transcom must be
deemed to originate or re-originate calls) was never raised, much less decided, in the bankruptcy
cases.
The Authority agrees with AT&T that neither resjudicata nor collateral estoppel applies in
this case. The panel finds that resjudicata does not apply because the Transcom bankruptcy case
and this docket do not involve identical parties and this is a breach of contract case and, therefore, is
not the same cause of action. The panel also finds that collateral estoppel does not apply because
the issue in this case - the origination or re-origination and termination of Halo's calls —was not
raised in the Transcom bankruptcy case. Based on these findings, the Authority concludes
unanimously that Halo's Motion to Dismiss Complaint 8'ith Prej udice should be denied.
THE HEARING
A Hearing in this matter was held before the voting panel of Directors assigned to this
docket on January 17, 2012. The Hearing was publicly noticed by the Hearing Officer on
'Id. at 4, n. 8.26igf, at 3, n. 6.27 Id
December 16, 2011 and January 12, 2012. Participating in the Hearing were the following parties
and their respective counsel:
For BellSouth Telecommunications, LLC d/b/a AT&T Tennessee —JoellePhillips, Esq., 333 Commerce Street, Suite 2101,Nashville TN 37201 and J.TysonCovey, Esq., Mayer Brown, LLP, 71 S. Wacker Drive, Chicago, IL 60606.
For Halo Wireless, Inc. —Paul S. Davidson, Esq., Wailer Lansden Dortch &Davis, LLP, 511 Union Street, Suite 2700, Nashville, TN 37219; Steven H.Thomas, Esq. and Jennifer M. Larson, Esq., McGuire, Craddock & Strother, P.C.,2501 N. Harwood, Suite 1800, Dallas, TX 75201; W. Scott McCollough, Esq.,McCollough/Henry PC, 1250 S. Capital of Texas Highway, Bldg. 2-235, West LakeHills, TX 78746.
During the Hearing, the Authority heard testimony from AT&T witnesses J. Scott McPhee and
Mark Neinast. Russ Wiseman and Robert Johnson testified for Halo.
AT&T's Cour wswr
In its Complaint, AT&T seeks to terminate its wireless ICA with Halo because Halo has
violated the ICA by sending AT&T large volumes of traffic that does not originate on a wireless
network. AT&T further asks the TRA to order Halo to pay it the amounts that it owes AT&T.
AT&T asserts that the TRA has jurisdiction over this matter, because it involves (1)violations of an
ICA entered into under 27 U.S.C. $$ 251 and 252 that was approved by the Authority and (2)
violations ofAT&T Tennessee's state tariffs. The Complaint contains four counts:
Count 1 - Breach of ICA: Sendin Wireline-Ori 'nated Traffic to AT&T Tennessee: AT&T
charges that Halo sends AT&T traffic that is wireline-originated, interstate, interLATA or
intraLATA toll traffic and that Halo disguises it as local traffic to avoid access charges that apply to
such traffic. AT&T asks the TRA to order Halo to terminate the Parties' ICA for this breach or, in
+ Complaint, p. 3 (July 26, 2011).
the alternative, to order Halo to cease and desist from sending wireline-originated traflic not
authorized by the ICA to AT&T. '
Count 2 - Breach of ICA: Alteration or Deletion of Call Detail: AT&T alleges that Halo
consistently alters the Charge Number ("CN"), which prevents AT&T from properly billing Halo
based on where the traffic originated. AT&T requests that the Authority authorize it to terminate
the Parties' ICA, or, in the alternative, to order Halo to cease and desist &om altering the CN on
traffic that it delivers to AT&T.
Count 3 —Pa ent for Termination of Wireline-Ori 'nated Traffic: The wireline-originated
traffic that Halo previously sent to AT&T is not governed by the Parties' ICA but is instead subject
to tariffed switched access charges. AT&T therefore asks the Authority to order Halo to pay all
access charges due to AT&T within thirty days of the Authority's order. '
Count 4 —Breach of ICA: Non- a ent for Facilities: AT&T asks the TRA to order Halo
to pay it for transport facilities that AT&T has provided but for which Halo has refused to pay.
POSITIONS OF THE PARTIES
The Parties have set forth their arguments in full in the record of this docket, in their pre-
hearing memoranda and in the presentation of their cases at the Hearing. The following section is
intended as a brief summary of the positions ofAT&T and Halo in this matter.
Position ofAT&T Tennessee
AT&T asserts that Halo has engaged in three separate types of breaches of the Parties'
ICA. Although the ICA requires Halo to send only wireless-originated traffic to AT&T, 74% of
29 Id. at 3Q.Id. at 4-5.
"Id. at 5-6."ld. at6.
Pre-hearing Memorandum ofBellSouth Telecommunications, LLC dba AT& T Tennessee, p. 1 (January 6, 2012).
the traf5c Halo sends to AT&T is landline-originated traf6c. According to AT&T, Halo's
contention that it is not breaching the ICA is based on a "wireless in the middle" theory, where
Transcom is an ESP; ESPs are treated as end-users; and Transcom must be deemed to "re-originate"
every call that passes through Transcom to Halo. '
AT&T argues that the FCC has expressly rejected Halo's theory in the Connect America
Fund Order, where the FCC singled out Halo by name. The FCC rejected Halo's theory that calls
that begin with an end-user dialing a call on a landline network can be "re-originated" as wireless
calls by passing through an ESP with wireless equipment in the middle of the call. Further, the
ESP exemption from access charges applies only to ESPs themselves, not to carriers like Halo that
serve them. AT&T asserts, however, that Transcom is not an ESP because reducing background38
noise and inserting "comfort noise" in periods of silence do not alter the fundamental character of
the service from the end-user's perspective.
AT&T argues that its call study showing 74% of the calls Halo sends to AT&T are landline-
originated is reliable. Further, Halo does not deny that at least some of its calls it sends to AT&T
are landline or IP-originated, which results in a breach of the ICA. '
Id. at 5. The terms "wireline" and "landline" are used interchangeably in the patties' testimony. For background,federal law specifies that wireless calls that originate and terminate within the same Major Trading Area ("MTA") are"local calls" and subject to reciprocal compensation rates. Calls exchanged between end-users in different MTAs areconsidered "InterMTA" and are subject to tariffed interstate or intrastate access charges, which are higher than
reciprocal compensation rates. Calls that originate &om landline telephones are considered "local" if they bothoriginate and terminate within the same local exchange area. Intercamer compensation rates for intra-exchange callsare set by the landline ICA; the rates for intrastate inter-exchange calls are set by the state access tariff, and the rates forinterstate inter-exchange calls are set by the FCC access tariff. See J. Scott McPhee, Pre-filed Direct Testimony, p. 9(December 19,2011).is Id
Pre-hearing Memorandum ofBellSouth Telecommunications, LLC dba AT& T Tennessee, p. 6 (january 6, 2012).Id. at 7.Id. at 9.Id. at 10-11.The term "IP"refers to internet Protocol.
' Id. at 11-12.
AT&T asserts that Halo also breached the ICA by inserting false charge numbers;
specifically, Halo inserts a Transcom Charge Number ("CN") on every call, and the effect is that
every call appears local.
AT&T alleges that Halo is breaching the ICA by refusing to pay for interconnection
facilities it obtains from AT&T. Because 100%of the traffic between the Parties is traffi that Halo
terminates on AT&T's network, Halo is responsible for 100% of the cost of the interconnection
facility under the Parties' wireless ICA.
Position of Halo Wireless Inc.
Halo asserts that it is not in breach of the ICA and AT&T is not entitled to "significant
amounts of money" from Halo for the traffic at issue. "" Halo further asserts that it has a valid and
subsisting Radio Station Authorization from the FCC authorizing Halo to provide wireless service
as a common carrier and to operate stations in the "3650-3700" MHz band, and is therefore
governed exclusively by federal law. " Halo argues that the FCC has exclusive jurisdiction over
federal licensing and that a state commission cannot take any action that would amount to a
suspension or revocation of a federal license.
Halo provides Commercial Mobile Radio Service ("CMRS") and sells telephone exchange
service to Transcom, which is a high volume customer. " Halo asserts that Transcom is an ESP
because it changes the information content of every call that passes through its system and also
"ld. at 12-13."Id. at 14-15.Halo 5'ireless, Inc. 's Pre-hearing Memorandum, p.1 (January 6, 2012).Russ Wiseman Pre-filed Direct Testimony, p. 2 (December 19, 2011).Halo fVireless, Inc. 's Pre-hearing Memorandum, p. 2 (January 6, 2012).
"Id.at 2-3.Id. at 1.
10
offers enhanced capabilities. Transcom is an end-user, not a carrier. Therefore, Halo argues that49 ~ 50
it is a CMRS carrier selling wireless telephone exchange service to an ESP end-user and its traf6c is
not wireline-originated. 'All of the calls received from Transcom within a particular MTA are
terminated in the same MTA, so that all of the traffic is subject to local charges in the ICA. '
Halo argues that it does not alter or delete call detail in violation of the ICA. Halo
populates the CN parameter with the Billing Telephone Number ("BTN")of its end-user customer-
Transcom. AT&T alleges improper modification of signaling information related to the CN
parameter, but the basis of this claim once again results from the assertion that Transcom is a carrier
rather than an end-user. ' Halo is exactly following industry practice applicable to an exchange
carrier providing telephone exchange service to an end-user, and in particular a communications-
intensive business end-user with sophisticated Customer Premises Equipment ("CPE").
Halo asserts that it does not owe facilities charges to AT&T. Under the ICA, AT&T may
only charge for interconnection facilities when AT&T-provided facilities are used by Halo to reach
the mutually agreed Point of Interconnection ("POI"). Under the terms of the ICA, the POI is
where Halo's network ends. AT&T is attempting to shift cost responsibility for what it calls
facilities" to Halo when the ICA assigns responsibility to AT&T because the "facilities" are all on
AT&T's side of the POI.
4'ld."Id.at4.' Id. at 4-6.' Id. at 1.Id. at 6-8.Id. at 8.Id.; see also Russ Wiseman Pre-filed Direct Testimony pp. 26-28 (December 19,2011).
56 Id"Id.at 9-14."Id at9."ld.
Id. at 14.
11
FINDINGS AND CONCLUSIONS
Jurisdiction
Throughout these proceedings, Halo has raised objections and challenged the jurisdiction of
the Authority to consider the Complaint in this matter. The Authority finds that it has jurisdiction to
consider the Complaint pursuant to both federal and state law. The Authority approved the
interconnection agreement between AT&T Tennessee and Halo by order dated June 21, 2010 in
TRA Docket No. 10-00063. ' Interconnection agreements are reviewable and enforceable by the
Authority pursuant to 47 U.S.C. g 252 and, in instances where the "market regulation" statute
applies, are enforceable pursuant to Tenn. Code Ann. $ 65-5-109(m). Further, the Authority has
jurisdiction over complaints concerning telecommunications service providers who have elected
"market regulation" such as AT&T, pursuant to Tenn. Code Ann. g 65-5-109(m), Halo did not
object to the Authority's jurisdiction to approve the interconnection agreement that now lies at the
center of this dispute.
The District Court, in its Order remanding this matter back to the Authority, also recognized
the TRA's jurisdiction over the interpretation of the ICA. The District Court explained the
respective roles of the Court and the Authority, stating:
The Telecommunications Act of 1996 ("the Act") requires that all ICAs be approvedby a state regulatory commission before they become effective. State commissionssuch as the TRA have authority to approve and disapprove interconnectionagreements, such as the one at issue herein. 47 U.S.C. g 252(e)(1). That authorityincludes the authority to interpret and enforce the provisions of agreements that thestate commissions have approved. Southwestern Bell Telephone Co. v. Public UtilityComm 'n of Texas, 208 F.3d 475, 479 (5th Cir. 2000); Millennium OneCommunications, 1nc. v. Public Utility Comm'n of Texas, 361 F.Supp. 2d 634, 636(W.D. Tex. 2005). Federal district courts have jurisdiction to review interpretation
' See In Re: Petition For Approval Of The Interconnection Agreement and Amendment Thereto Between BellSouth dbaAT&T Tennessee and Halo II'ireless, Inc., Docket No. 10-00063, Order Approving the Interconnection Agreement andAmendment Thereto (June 21, 2010).
See In Re: Petition for Approval of the Interconnection Agreement and Amendment Thereto Between BellSouth dbaAT& T Tennessee and Halo li'ireless, Inc., Docket No. 10-00063.
12
and enforcement decisions of the state commissions. Id.; Southwestern Bell at p.480, 47 U.S.C. f 252(e)(6). Here, as noted above, there is no state commissiondetermination to review.
In Central Telephone Co. of Virginia v. Sprint Communications Co. of Virginia, Inc. ,759 F.Supp. 2d 772 (E.D. Va. 2011), the court held that federal district courts havefederal question jurisdiction to interpret and enforce an ICA, pursuant to 28 U.S.C. $1331. Id. at 778; see also BellSouth Telecommunications, Inc. v. MCImetro AccessTransmission Servs. , Inc, , 317 F,3d 1270, 1278-79 (11th Cir. 2003) (federal courtshave jurisdiction under Section 1331 to hear challenges to state commission ordersinterpreting ICAs because they arise under federal law) and Michigan Bell TelephoneCo. v. MCI Metro Access Transmission Servs. , 323 F.3d 348, 353 (6th Cir.2003)(federal courts have jurisdiction to review state commission orders forcompliance with federal law). Although these cases involved state commissionorders, their holdings provide guidance on this issue.
Based on the reasoning in the above-cited cases, the Court finds that it has subjectmatter jurisdiction to hear this matter, pursuant to 28 U.S.C. g 1331 because theICAs arise under federal law. As stated in Verizon Maryland, ICAs are federallymandated agreements and to the extent the ICA imposes a duty consistent with theAct, that duty is a federal requirement. Verizon Maryland, Inc. v. Global NAPS, Inc. ,377 F.3d 355, 364 (4th Cir. 2004).
The fact that this Court has jurisdiction does not end the matter, however. The factthat the Court could hear this action does not necessarily mean the Court should hearthis action. Although the Act details how parties, states and federal courts can draftand approve ICAs, it is silent on how and in what fora parties can enforce ICAs.Global NAPS, Inc. v. Verizon New England Inc. , 603 F.3d 71, 83 (1st Cir. 2010).Because the Act does not specifically mandate exhaustion of state action, whether toconstrue the Act as prescribing an exhaustion requirement is a matter for the Court'sdiscretionary judgment. Ohio Bell Tel. Co., Inc. v. Global NAPS Ohio, Inc. , 540F.Supp. 2d 914, 919(S.D. Ohio 2008).
The Third Circuit Court of Appeals has held that interpretation and enforcementactions that arise after a state commission has approved an ICA must be litigated inthe first instance before the relevant state commission. Core Communications, Inc.v. Verizon Pennsylvania, Inc. , 493 F.3d 333, 344 (3d Cir. 2007). A party may thenproceed to federal court to seek review of the commission's decision. Id. CitingCore, a district court in Ohio has also held that a complainant is required to firstlitigate its breach-of-ICA claims before the state commission in order to seek reviewin the district court. Ohio Bell, 540 F.Supp. 2d at 919-920 (citing cases fromnumerous district courts).
On the other hand, in Central Telephone, the court held that a party to an ICA is notrequired to exhaust administrative remedies by bringing claims for breach of an ICAfirst to a state commission. Central Telephone, 759 F.Supp. 2d at 778 and 786.
13
The Court agrees with the reasoning of the Core and Ohio Bell opinions. The Actprovides for judicial review of a "determination" by the state commission. Untilsuch determination is made, the Court cannot exercise this judicial review. See OhioBell, 540 F.Supp. 2d at 919. As the Core court stated: "a state commission'sauthority to approve or reject an interconnection agreement would itself beundermined if it lacked authority to determine in the first instance the meaning of anagreement that it has approved. " Core, 493 F.3d at 343 (citing BellSouthTelecommunications, 317F.3d at 1278, n.9).
The Authority is mindful, however, of the restrictions placed upon these proceedings by the
Order of the Bankruptcy Court. In an Order issued on October 26, 2011, the Bankruptcy Court
ruled that "pursuant to 11 U.S,C. f 362(b)(4), the automatic stay imposed by 11 U.S.C. g 362. . . is
not applicable to currently pending State Commission Proceedings, " including proceedings brought
by AT&T. However, the Bankruptcy Court further stated that
any regulatory proceedings. . . may be advanced to a conclusion and a decision inrespect of such matters may be rendered; provided however, that nothing herein shallpermit, as part of such proceedings:
A. liquidation of the amount of any claim against the Debtor; or
B. any action which affects the debtor-creditor relationship between theDebtor and any creditor or potential creditor.
Therefore, nothing in this Order is intended to permit as part of these proceedings the
liquidation of the amount of any claim against Halo or to affect the debtor-creditor
relationship between the Parties beyond that permitted in the Bankruptcy Court's October
26, 2011 Order.
AT&T's Com laint - Count 1
Count 1 of the Complaint alleges that Halo has breached the ICA by impermissibly sending
traf5c originating from wireline telephones to AT&T, although the interconnection agreement only
BellSouth Telecommunications, Inc. v. Halo fVireless, Inc, Case No. 3-11-0795,M.D. Tenn. , Memorandum, pp. 4-6
(November 1, 2011).In re: Halo JYireless, Inc. , Case No. 11-42464, Bkrtcy. E. D. Tex., Order Granting Motion of the AT&T Companies
to Determine Automatic Stay Inapplicable and for Relief from the Automatic Stay, p. 1 (October 26, 2011).' In re: Halo fVireless, Inc. , Case No. 11-42464, Bkrtcy. E. D. Tex., Order Granting Motion of the AT&T Companies
to Determine Automatic Stay Inapplicable and for Relieffrom the Automatic Stay, p. 2.
14
permits Halo to send AT&T traffic that originates from wireless networks. The applicable language
from the interconnection agreement reads:
Whereas, the Parties have agreed that this Agreement will apply only to (I) traffithat originates on AT&T's network or is transited through AT&T's network and isrouted to Carrier's wireless network for wireless termination by Carrier; and (2)traffic that originates through wireless transmitting and receiving facilities before[Halo] delivers traf5c to AT&T for termination by AT&T or for transit to anothernetwork.
The Authority interprets the language of the ICA to require Halo only to deliver traf5c that
has originated through wireless transmitting and receiving facilities. Thus, evidence that Halo has
delivered wireline-originated traffic will result in a finding that Halo has breached the ICA.
The Authority has reviewed Halo's ex parte filings with the FCC in the Connect America
Fund docket, where the description of Halo and Transcom's operations is the same as that which
has been presented to the TRA in this proceeding. Indeed, reviewing the ex parte filings made by
Halo makes it clear that the FCC was aware of Halo's assertion that it provided service to ESPs and
used wireless technology. In the resulting Connect America Fund Order, the FCC addressed and
rejected Halo's assertion that traffic from its customer Transcom is wirelessly originated. The
Connect America Fund Order states:
We first address a dispute regarding the interpretation of the intraMTA rule. HaloWireless (Halo) asserts that it offers "Common Carrier wireless exchange services toESP and enterprise customers" in which the customer "connects wirelessly to Halobase stations in each MTA." It further asserts that its "high volume" service isCMRS because "the customer connects to Halo's base station using wirelessequipment which is capable of operation while in motion. " Halo argues that, forpurposes of applying the intraMTA rule, "[t]he origination point for Halo traf5c isthe base station to which Halo's customers connect wirelessly. "On the other hand,ERTA claims that Halo's traffic is not from its own retail customers but is insteadfrom a number of other LECs, CLECs, and CMRS providers. NTCA furthersubmitted an analysis of call records for calls received by some of its member rural
LECs from Halo indicating that most of the calls either did not originate on a CMRSline or were not intraMTA, and that even if CMRS might be used "in the middle, "
J. Scott McPhee, Pre-filed Direct Testimony, pp. 6-7 (December 19, 2011).
this does not affect the categorization of the call for intercarrier compensationpurposes. These parties thus assert that by characterizing access traf5c as intraMTAreciprocal compensation traffic, Halo is failing to pay the requisite compensation toterminating rural LECs for a very large amount of traffic. Responding to this dispute,CTIA asserts that "it is unclear whether the intraMTA rules would even apply in thatcase."
After clearly describing the operations of Halo, including its use of wireless technology and
relationship with Transcom, the FCC found that calls are not originated by Transcom and that
wireline originated calls are not reclassified as wireless calls because of a wireless link in the
middle of the call path. The FCC in the Connect America Fund Order continues:
We clarify that a call is considered to be originated by a CMRS provider forpurposes of the intraMTA rule only if the calling party initiating the call has done sothrough a CMRS provider. Where a provider is merely providing a transiting service,it is well established that a transiting carrier is not considered the originating carrierfor purposes of the reciprocal compensation rules. Thus, we agree with NECA thatthe "re-origination" of a call over a wireless link in the middle of the call path doesnot convert a wireline-originated call into a CMRS-originated call for purposes ofreciprocal compensation and we disagree with Halo's contrary position.
The Authority agrees with the FCC's rejection of Halo's assertions and finds that the "re-
origination" of a call over a wireless link in the middle of the call path does not convert a wireline-
originated call into a wireless-originated call for purposes of reciprocal compensation.
Nor does Halo deny that it is sending traffic that originated on the wireline PSTN. In
response to the question, "Do you admit that some of the communications in issue actually started
on other networks?" Halo's witness Mr. Wiseman responds "Most of the calls probably did start on
other networks before they came to Transcom for processing. It would not surprise me if some of
them started on the PSTN."
Connect America Fund Order, $ 1005 footnotes omitted). The term "CLEC"refets to Competitive Local ExchangeCarrier.
Connect America Fund Order, $ 1006 footnotes omitted).The term "PSTN" refers to the Public Switched Telephone Network, which means the calls were originated on the
landline network.Russ Wiseman, Pre-filed Direct Testimony, p. 14 (December 19,2011).
16
AT&T's traffic study also demonstrates that Halo has delivered wireline traffic to AT&T.
AT&T estimates that about 74% of the traf5c Halo sends to AT&T originates on the networks of7Ilandline carriers. Even though Halo does not deny it has likely sent wireline traf5c to AT&T, it
contests the accuracy of AT&T's traffic study. Halo's arguments against AT&T's traf5c study are:
(I) that telephone numbers are an unreliable indictor of who originates a call, if wireless technology
is used for the call and where the call originates and (2) calls that originate using IP technology are
not landline calls.
The Authority acknowledges that a certain degree of imprecision can occur when analyzing
the origin to individual telephone calls, due to factors such as the advent of number portability and
the growth of wireless and IP telephony. However, because of these technical issues, the industry
has developed conventions and practices to evaluate calls for the purpose of intercarrier
compensation. The Authority finds that the methodology used to collect the data and the
interpretation of the data in the AT&T study are based upon common industry practices to classify
whether traf5c is originated on wireline or wireless networks. In addition, the Authority finds that
the convention of collecting data for a single week is sufficient to demonstrate whether wireline
traf5c was sent to AT&T by Halo. Further, Halo identifies several calls included in AT&T's traf5c
study as likely being IP-originated, ' which is considered by the industry to be wireline-originated
for the purpose of intercamer compensation rules. "
Based upon the Authority's agreement with the FCC's dispositive decision in the Connect
America Fund Order, Halo's admission that it has delivered wireline-originated and IP-originated
traffic to AT&T, and the information contained in AT&T's traffic study, the Authority finds that
Halo has materially breached its interconnection agreement with AT&T.
' Mark Neinast, Pre-filed Direct Testimony, pp. 3, 11 and Attachment MN-3 (December 19,2011).Russ Wiseman, Pre-filed Rebuttal Testimony, pp. 8-9 (January 3, 2012).Mark Neinast, Pre-filed Rebuttal Testimony, p. 6 (January 3, 2012).
17
AT&T's Com laint - Count 2
Count 2 of the Complaint alleges that Halo breached its interconnection agreement with
AT&T by improperly altering call detail information that allows AT&T to properly classify calls for
the purpose of intercarrier compensation. Section XIV.G of the ICA requires:
The parties will provide each other with the proper call information, including allproper translations for routing between networks and any information necessary forbilling where BellSouth provides recording capabilities. This exchange ofinformation is required to enable each party to bill properly.
In addition, Section XIV.E of the ICA also requires Halo to provide many types of call
detail information, including the Charge Number.
In most cases, industry members use the Calling Party Number {"CPN") to determine
whether a call is jurisdictionally long-distance or local. In rare cases a CN is included in the call
detail record to indicate the number that will actually be financially responsible for the call. For
example, some businesses want all calls inade by its employees in a particular once to be billed to
single number. Halo admits that it uses Transcom's BTN to populate the CN fields on tragic since
February 2011.
As with Count 1, the Authority finds that the FCC's Connect America Fund Order
dispositively resolves this issue. Because the FCC dismisses "re-origination" by Transcom,
Transcom clearly cannot be the originating entity and thus inserting Transcom's number as the
Charge Number is inappropriate. Therefore, because Halo has improperly altered call detail
information, the Authority finds that Halo has materially breached its interconnection agreement
with AT&T.
Complaint, p. 4 (July 26, 2011)."Russ Wiseman, Pre-filed Direct Testimony, pp. 29-30 (December 19, 2011).
AT&T's Com laint —Count 3
Count 3 of the Complaint alleges that Halo has not properly compensated AT&T for the
traffic it has delivered. Halo has been paying AT&T reciprocal compensation, which is only
appropriate if the end-user initiated the call wirelessly within the MTA in which it is terminated,
instead of switched access charges, which are appropriate for wireline-originated calls. The FCC's
decision in the Connect America Fund Order, with which the Authority concurs, is that Halo's
traffic does not originate within an MTA with its customer Transcom. In addition, AT&T's traffic
study demonstrates that AT&T terminated calls that originated outside the MTA where it was
terminated. Further, Halo's use of MTA specific numbers to assert a 100% intra-MTA factor
necessarily implies that switched access charges were avoided since Transcom was not the true
originating party.
The Authority's findings on Counts 1 and 2 of the Complaint concerning the wireline and
IP-origination of Halo's traffic necessarily lead to the conclusion that Halo has not been properly
compensating AT&T for the traffic it has delivered. The payment of reciprocal compensation is
only appropriate if the end-user, which is not Transcom, initiated the call wirelessly within the
MTA where it is terminated. Thus, Halo has failed to compensate AT&T for calls where it was due
switched access charges. Therefore, the Authority finds that Halo is liable to AT&T Tennessee for
access charges on the interstate and intrastate interLATA and intraLATA landline traffic it has sent
to AT&T Tennessee.
AT&T's Com laint - Count 4
Count 4 of the Complaint alleges that Halo has refused to pay AT&T for transport facilities,
Section V.B,page 10of the ICA states:
19
BellSouth will bear the cost of the two-way trunk group for the proportion of thefacility utilized for the delivery of BellSouth originated Local traf5c to Carrier's POIwithin BellSouth's service territory and within the LATA (calculated based on thenumber ofminutes of trafIic identified as BellSouth's divided by the total minutes ofuse on the facility), and Carrier will provide or bear the cost of the two-way trunkgroup for all other traffic, including Intermediary traffic.
Halo does not dispute that it terminates all of its traffic on AT&T's network, but it does
dispute AT&T's charges for the two-way trunk groups that connect the Parties. Halo details the
arrangement of facilities with which it connects to AT&T in various locations, and it cites from
FCC rules to argue that AT&T cannot charge Halo for facilities on AT&T's side of the POI. This
line of reasoning might be appropriate if Halo were a CLEC. However, Halo is not a CLEC but
rather a CMRS provider, and under the ICA it signed with AT&T, each party is required to pay its
share of the facilities cost. The Authority finds that Halo owes AT8r T for the proportionate share of
the facilities that connect Halo's Point of Presence ("POP") to AT&T's network as required by the
ICA. The ICA allocates the costs of facilities based on the proportion of traffic each party sends to
the other party, and since Halo sends 100 % of its traffic to AT&T, the Authority finds that Halo
should pay 100%of the cost for these facilities as required by the ICA.
Transcom Is Not an Enhanced Service Provider
The FCC has established a bright-line rule that the "enhanced" service designation does not
apply to services that merely "facilitate establishment of a basic transmission path over which a
telephone call may be completed, without altering the fundamental character of the telephone
service, " and that a service is not "enhanced" when the service does not alter the fundamental
character of the service from the end-user 's perspective. 'Thus, for example, the FCC has held that
Mark Neinast, Pre-filed Direct Testimony, p. 19 (December 19, 2011)."Russ Wiseman, Pre-filed Direct Testimony, p. 41 (December 19,2011).Implementation ofthe Non-Accounting Safeguards ofSections 271 and 272 ofthe Communications Act ofI934, 11
FCC Rcd. 21905,$ 107 (1996).
20
services are not "enhanced" when customers use the same dialing method for allegedly "enhanced"
calls that they would for any other call, ' or where the alleged "enhancement" was made "without
the advance knowledge or consent of the customer" that placed the call and the customer is not
"provided with the 'capability' to do anything other than make a telephone call."
The Authority finds that Transcom's services fail to meet the FCC's bright-line rule, since
the record in this proceeding indicates that Transcom provides no services to actual end-users and
does not offer any enhancements discernable to the person that actually places the call. ' The
record also supports the conclusion that end-users are completely unaware that Transcom is even
involved in call delivery. Nor does Halo's testimony prove that Transcom is an ESP. Halo asserts
that Transcom
... employs computer processing applications that act on the format, content, code,protocol or similar aspects of the received information. The platform will providethe customer additional, different, or restructured information. This is done bygenerating, acquiring, storing, transforming, processing, retrieving, utilizing ormaking available information via telecommunications. '
However, despite the claim of computer processing of data, Transcom only reduces
background noise and inserts "comfort noise" in periods of silence so that those periods of silence
are not mistaken for the end of a call. The Pennsylvania Public Utility Commission rejected a
similar claim relating to Transcom's services, finding that "the removal of background noise" and
Petition for Declaratory Ruling that AT&T's Phone-to-Phone IP Telephony Services are Exempt Pom AccessCharges, 19 FCC Rcd. 7457, $ 15 (2004) ("IP-in-the-Middle Order" ).
AT&T Corp. Petition for Declaratory Ruling Regarding Enhanced Prepaid Calling Card Services, 20 FCC Red.4826, $ 16, n. 28 (2005) ("AT& T Calling Card Decision" ).' Mark Neinast, Pre-Gled Rebuttal Testimony, p. 5 (January 3, 2012).
S2"Robert Johnson, Pre-filed Rebuttal Testimony, p. 12 (January 3, 2012).Id. at 12-13.
21
"the insertion of white noise" do not make Transcom an ESP. The alleged "enhancements" that
Transcom claims it makes to calls that transit its network are simply processes to improve the
quality of the call. Telecommunications networks have been routinely making those types of
improvements for years and, in some cases, decades. Carriers have routinely incorporated
equipment into networks that have, for example, expanded the dynamic range of a voice call to
improve clarity. The conversion from analog to digital and back to analog has significantly
improved call quality, yet none of these processes are deemed "enhancements" in the sense of an
ESP. For the reasons above, the Authority finds that Transcom is not an ESP for this particular86
traffic.
IT IS THEREFORE ORDERED THAT:
1. Halo Wireless Inc. 's Motion to Dismiss Complaint With Prejudice is denied.
2. BellSouth Telecommunications, LLC d/b/a AT&T Tennessee is authorized to terminate
the interconnection agreement previously approved by the Authority in TRA Docket No. 10-00063
and to stop accepting traf5c Rom Halo Wireless, Inc.
3. Halo Wireless, Inc. is liable to BellSouth Telecommunications, LLC d/b/a AT&T
Tennessee for access charges on the interstate and intrastate interLATA and intraLATA landline
traf6c it has sent to AT&T Tennessee thus far and for the interconnection facilities it has obtained
from AT&T Tennessee. However, nothing in this Order is intended to permit as part of these
proceedings the liquidation of the amount of any claim against Halo or to affect the debtor-creditor
relationship between the Parties beyond that permitted in the Order Granting Motion of the ATcrrT
Palmerton Tel Co. v. Global NAPS South, Inc., et al. , PA PUC Docket No. C-2009-2093336, 2011 WL 1259661,at16-17 (Penn. PUC, March 16, 2010). ("We find that Transcom does not supply GNAPS with 'enhanced' traffic underapplicable federal rules" ). Note that the Pennsylvania Public Utility Commission specifically rejected the TranscomBankruptcy Court's April 28, 2005 Memorandum Opinion finding Transcom to be an ESP on the basis that Transcomhad indicated in that proceeding that it provided "data communications services over private IP networks (VoIP)."Id.The Authority is not persuaded by the Transcom bankruptcy court rulings regarding Transcom's status as an ESP,either.86 Id
22
Companies to Determine Automatic Stay Inapplicable and for Relief From the Automatic Stay fDkt.
No. 13], issued by the United States Bankruptcy Court for the Eastern District of Texas, Sherman
Division, in Case No. 11-42464-btr-11 on October 26, 2011. AT&T Tennessee may pursue further
action for the collection of access charges or facilities charges in the United States Bankruptcy
Court for the Eastern District ofTexas, Sherman Division, or other appropriate fora as permitted by
that Court.
4. Any party aggrieved by the Authority's decision in this matter may file a Petition for
Reconsideration with the Authority within fiAeen days 6om the date of this Order.
5. Any party aggrieved by the Authority's decision in this matter has the right to judicial
review by filing a Petition for Review in the Tennessee Court of Appeals, Middle Section, within
sixty days 6om the date of this Order.
K eth C. Hill, Chairman
Sara Kyle, Director
Mary W. Fre, Director
23